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Production Efforts in Large Indian Cities: A Network-based Approach

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  • Sebastian Bervoets

    (Sebastian Bervoets, Aix-Marseille University (Aix-Marseille School of Economics), CNRS and EHESS. Greqam Centre de la Vieille Charité, rue de la Charité. Marseille. France. E-mail: sebastian.bervoets@univ-amu.fr)

  • Frédéric Deroïan

    (Frédéric Deroïan, Aix-Marseille University (Aix-Marseille School of Economics), CNRS and EHESS. E-mail: frederic.deroian@univ-amu.fr)

Abstract

In this article we construct a network of roads connecting large Indian cities and we evaluate this network’s overall performance. We consider a model where the production efforts of connected cities are strategic complements, and we relate the equilibrium effort proï¬ le to a well known centrality measure, the Katz-Bonacich centrality. We then make use of this result to compute the level of efforts of different cities in the current network and identify which city contributes most to overall efforts, which existing road is the most influential and which new road should be constructed in priority. Our results shed light on the importance of relatively small cities on aggregate efforts. Our exercise illustrates how network details might generate unexpected effects.JEL: C72, D85

Suggested Citation

  • Sebastian Bervoets & Frédéric Deroïan, 2013. "Production Efforts in Large Indian Cities: A Network-based Approach," Journal of Interdisciplinary Economics, , vol. 25(1-2), pages 117-145, January.
    • Handle: RePEc:sae:jinter:v:25:y:2013:i:1-2:p:117-145
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    Keywords

    Network policy; Indian National Roads Network; strategic complementarity; aggregate efforts maximization;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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