Network Capital

Robert Akerlof and Richard Holden

No 11763, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper explores the problem of assembling capital for projects. It can be difficult to assemble capital, when it is disaggregated, for a project that exhibits increasing returns. Small investors may be reluctant to participate, as they may question the ability of the project owner to raise the additional capital he requires. This suggests the possibility that agents with blocks of capital (capital that is already aggregated) might earn rents. Similarly, agents with "network capital" — that is, an ability to aggregate the capital of others — may earn rents. In this paper, we develop a theory of the rents attached to capital assembly, and discuss the implications for a range of issues from investment, to growth, to inequality.

Keywords: Network capital; investment; Increasing returns; Inequality (search for similar items in EconPapers)
JEL-codes: D24 D30 D85 G30 L26 (search for similar items in EconPapers)
Date: 2017-01
New Economics Papers: this item is included in nep-mic, nep-net and nep-ppm
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP11763 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:11763

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP11763

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().