Economics of Networks

Course goals

Content

Network theory has become an important branch of research in the social sciences. It underlines the importance of interaction and interdependence between the units of a complex system. It applies to any system of entities and their relationships including friendship networks, inter-firm alliances, citations between texts, transportation flows between airports, trade flows between countries, etcetera. Since economic systems are increasingly built on interdependences, network theory has become central tool in analyzing global trade flows, financial system vulnerability, supply chains or investment networks. In management science, applications of network theory include the effect of business networks on firm performance (survival, innovation) and the importance of networks for successful entrepreneurship. In economic geography, these questions are extended to integrate the spatial dimension, either to study the interdependence between regions or to consider how organizational network composition is driven by geographical considerations. In transport geography, network theory is used to analyze hub-and-spoke systems as well as the optimal design of transportation systems. In urban geography, following the seminal work of Manuel Castells (on space of flows versus space of places) and Saskia Sassen (on world cities), network theory has become central tool in analyzing what determines that some cities are well-connected in global networks and others are not. This course aims to provide an overview of the core topics in geography and economics regarding networks and to teach students how to apply network concepts in an empirical research design, which includes data collection, network visualization and network analysis.