G. M. Peter Swann

Social Networks and Choice of Mobile Phone Operator

The aim of this paper is to estimate the importance of (induced) network effects in the use of mobile telephones and the impact of the structure of social networks on a consumers adoption decision. This is done using social network data obtained from a survey of second year undergraduate students at the University of Nottingham Business School. We find that students strongly coordinate their choice of mobile phone operators, but do this only for operators which charge a price difference between on- and off-net calls. Coordination is strongest within groups of students who frequently interact with each other, but weaker with students from outside their group. Furthermore, the students did not coordinate their choice of mobile handsets - there rather is a tendency to choose a different handset than the one used by their friends.

The rise, fall and renaissance of the resort: a simple economic model.

There is a large volume of literature on the life cycle of the tourist resort. However, there is scope to develop this body of work by harnessing recent contributions in the economics literature on cycles or waves in demand. This paper presents a simple economic model of the rise, fall and possible renaissance of the resort. The analysis is based on the work of Cowan et al (1997, 2004), which models waves in consumption when there are interdependencies between consumers. Of particular interest here are the conditions under which we may observe a ‘travelling wave’, where a new resort starts off as a distinctive and select venue but then, as it grows in popularity, starts to go downmarket. After the resort has been unfashionable for some time and unattractive associations are far enough in the past, a new sort of pioneer (accompanied by a new wave of investment) can start off a second wave of popularity. The model presented was motivated by reference to the history of the city of Bath, which enjoyed a long period as a very popular resort and then fell into decline in the 19th century, but enjoyed a renaissance in the mid-20th century to become one of the most popular medium-sized towns in England.

The Impact Of Defence Integrators And Standards On Vertical And Horizontal Innovation In The Defence Industry

This paper analyses the extent and character of product innovation in defence technologies where there are strong network effects, but where there is not a generally accepted system of open standards. Specifically, we examine the implications for innovation from the development of network‐centric defence agencies accompanied by the creation of system integrators in the defence industry. The results show that although these developments are expected to have a number of positive impacts, such as enhanced security and gate‐keeping of the relevant technologies, they are also likely to have an adverse effect on the available variety of new defence products.

The Fall and Rise of the Local Brew: Process Innovation, Horizontal Product Innovation and the Geographic Dispersion of Breweries in England, 1900-2004

In the presence of strong economies of scale, a fall in transport costs can lead to a more pronounced geographical concentration of production. This is very apparent in the growing concentration of breweries in England from 1900-1970. The number of breweries in England fell sharply between 1900 and 1970, and so also did the range of locations in which they were located. In 1900, many small villages could boast a brewery of their own, but by 1970, the vast majority of breweries were located in towns and cities. However, as the number of discerning consumers has grown, with a pronounced taste for horizontal product variety, the tendency towards geographical concentration has declined in the last forty years. The consumer group CAMRA, arguably the most successful consumer group ever formed, has been instrumental in educating English beer drinkers to appreciate horizontal product differentiation in beers and ales. Since the foundation of CAMRA in 1971, we have seen many new micro-breweries enter the industry, and a rapidly increasing geographical dispersion of these micro-breweries.

The econocracy: the perils of leaving economics to the experts

In The Econocracy: The Perils of Leaving Economics to the Experts , Joe Earle, Cahal Moran and Zach Ward-Perkins argue that the logic of economics has come to shape how political issues are framed and addressed, leading to a deep divide between economics ‘experts’ and the majority of citizens who have grown increasingly suspicious of the discipline. This concise and well-researched book is a timely critique of the state of economics today and may empower ‘citizen economists’ to become part of the debate, writes Maxine Montaigne. (A blog for us by The Econocracy authors is also available here.)

Three Perspectives on an Innovation: Thirty Years of PC Operating Systems

This paper describes the main innovations in PC operating systems from 1975 to the present, and looks at these innovations from three perspectives. First, to what degree have these innovations enhanced the competitiveness of the innovator? Second, to what degree have these innovations contributed to wealth creation in the economy? Third, to what degree do these innovations contribute to the achievement of a sustainable economy? We find that these three perspectives give very different assessments of the merits of operating system innovations. While they have strengthened the competitive position of Microsoft in applications software as well as operating systems, it is arguable that these innovations are running into diminishing returns as far as wealth creation is concerned. Moreover, some of the most recent innovations are creating unexpected, but environmentally hazardous side effects.

The Wise University or The Worst Market Failure is in the Allocation of Resources to Systems Thinking

How should the university respond to the ever more complex global division of labour in the global economy? This paper argues that the appropriate response is to progress in an opposite direction. Instead of being a clever institution, with an ever more complex division of labour, the university should become a wise institution, with an ever greater capacity for systems thinking. The paper demonstrates that the costs of inadequate system understanding can be enormous, and a most striking example of this is the fallout from the credit crunch of 2007. It is arguable that there is a severe market failure in the allocation of resources to systems thinking. If the greatest priorities for public funding are those where the greatest market failures are found, then investment in system thinking should be a top priority for the wise university.

Doubtful Significance: Can an Amorphous Cloud of Points Really Illustrate a Significant Relationship?

Can an amorphous cloud of points really illustrate a statistically significant relationship between two variables? We examine one particular scatter-plot from 402 observations which appears to show no relationship whatever between the Y and X variables, and yet, the conventional OLS regression finds a t-statistic of 3.0. To explain this puzzle, we derive a formula showing that the conventional t-statistic is the product of a signal-to-noise ratio and the square root of the regression degrees of freedom. This signal-to-noise ratio is a convenient measure of the visual clarity of any relationship in the scatter-plot. If the ratio is 1, then the relationship is reasonably clear to the eye. If the ratio is 10, then it is very clear indeed. But if the ratio is 0.1, or less, then the relationship is more or less invisible to the eye. However, even if the signal-to-noise ratio is very low, our formula shows that we can still obtain a large t-statistic, so long as we have enough observations. But how it can make sense to say that an amorphous cloud of points is ‘significant’? The standard independence assumption of regression analysis is absolutely critical here, and robustness checks show that without it, the relationship between y and x could be almost anything. Finally, we examine a sample of 2220 parameter estimates taken from recent articles in 20 leading journals, and find that for most of these – even those that are reported as statistically significant – the implicit signal to noise ratio is very low indeed (median value 0.033). The implication is that in the absence of the independence assumption, these parameter estimates tell us very little indeed. We conclude with a brief reexamination of this critical independence assumption and whether it is really justified.