Tackseung Jun

Network marketing on a small-world network

We investigate a dynamic model of network marketing in a small-world network structure artificially constructed similarly to the Watts–Strogatz network model. Different from the traditional marketing, consumers can also play the role of the manufacturers selling agents in network marketing, which is stimulated by the referral fee the manufacturer offers. As the wiring probability α is increased from zero to unity, the network changes from the one-dimensional regular directed network to the star network where all but one player are connected to one consumer. The price p of the product and the referral fee r are used as free parameters to maximize the profit of the manufacturer. It is observed that at α=0 the maximized profit is constant independent of the network size N while at α≠0, it increases linearly with N. This is in parallel to the small-world transition. It is also revealed that while the optimal value of p stays at an almost constant level in a broad range of α, that of r is sensitive to a change in the network structure. The consumer surplus is also studied and discussed.

Consumer referral in a small world network

Abstract We consider a firm’s profit maximization problem when the demand for the product is created by referrals between consumers connected in a small world network. We generate a small world network by applying the rewiring algorithm of Watts and Strogatz and incorporate it into the profit maximization problem. We demonstrate (i) that contrary to our anticipation, the firm’s profit smoothly (not rapidly) approaches the profit in the complete network as the rewiring probability increases, but (ii) that the per consumer profit is saturated to a finite non-zero value when the rewiring probability is near zero, implying a small world transition.

Climate change: a new metric to measure changes in the frequency of extreme temperatures using record data

Consensus on global warming is the result of multiple and varying lines of evidence, and one key ramification is the increase in frequency of extreme climate events including record high temperatures. Here we develop a metric—called “record equivalent draws” (RED)—based on record high (low) temperature observations, and show that changes in RED approximate changes in the likelihood of extreme high (low) temperatures. Since we also show that this metric is independent of the specifics of the underlying temperature distributions, RED estimates can be aggregated across different climates to provide a genuinely global assessment of climate change. Using data on monthly average temperatures across the global landmass we find that the frequency of extreme high temperatures increased 10-fold between the first three decades of the last century (1900–1929) and the most recent decade (1999–2008). A more disaggregated analysis shows that the increase in frequency of extreme high temperatures is greater in the tropics than in higher latitudes, a pattern that is not indicated by changes in mean temperature. Our RED estimates also suggest concurrent increases in the frequency of both extreme high and extreme low temperatures during 2002–2008, a period when we observe a plateauing of global mean temperature. Using daily extreme temperature observations, we find that the frequency of extreme high temperatures is greater in the daily minimum temperature time-series compared to the daily maximum temperature time-series. There is no such observable difference in the frequency of extreme low temperatures between the daily minimum and daily maximum.

Temperature, maize yield, and civil conflicts in sub-Saharan Africa

Civil conflicts have swept through many parts of sub-Saharan Africa in the past half century. Recently, scholars from backgrounds as diver as climate science, economics, political science, and anthropology have explored the effects of climate change on these civil conflicts, with mixed results. Our empirical results confirm effects of temperature on the incidence of civil conflict. The key findings are as follows: (i) between 1970 and 2012 in sub-Saharan Africa, a high temperature during maize growing season reduced the crop’s yield, which in turn increased the incidence of civil conflict and (ii) future expected warming is expected to increase civil conflict incidence by 33% in the period 2031–2050, and by 100% in the period 2081–3010, compared to levels between 1981 and 2000. These results highlight the importance of sufficient food supplies and adaptation to increased climate warming to facilitate peace in sub-Saharan Africa.

A New Metric for Indian Monsoon Rainfall Extremes

AbstractExtreme monsoon rainfall in India has disastrous consequences, including significant socioeconomic impacts. However, little is known about the overall trends and climate factors associated with extreme rainfall because rainfall greatly varies across India and because few appropriate methods are available to measure extreme rainfall in the context of such heterogeneity. To provide a comprehensive assessment of extreme monsoon rainfall, the authors developed a metric using record rainfall data to measure the changes in the likelihood of extreme high and extreme low rainfall over time; this metric is independent of the characteristics of the underlying rainfall distributions. Hence, the metric is ideally suited to aggregate extreme rainfall information across heterogeneous regions covering India. The authors found that from 1930 to 2013, the likelihood of extreme high and extreme low rainfall increases 2-fold and 4-fold, respectively. These overall trend increases are driven by anomalous increases, p...

Profitability of a Merger on Networks

In this paper, we examine the profitability of a merger when agents interact on a network. We assume that the value function is size‐dependent, i.e. the value of a coalition does not depend on the identities of the coalition but only on each size of its components. Under the assumption that the third difference of the value function with respect to the size of each component is nonnegative, which is a weaker condition of increasing complementarity by Segal in 2003, we show that a merger of any subset of agents cannot be profitable if the underlying network is cycle‐complete.