Trading in Networks: Theory and Experiments

Choi, S, Galeotti, A and Goyal, S (2017) Trading in Networks: Theory and Experiments. Journal of the European Economic Association, 15 (4). pp. 784-817. ISSN 1542-4766 OPEN ACCESS


We propose a model of posted prices in networks. The model maps traditional concepts of market power, competition, and double marginalization into networks, allowing for the study of pricing in complex structures of intermediation, such as supply chains, transportation and communication networks, and financial brokerage. We provide a complete characterization of equilibrium prices. Our experiments complement our theoretical work and point to node criticality as an organizing principle for understanding pricing, efficiency, and the division of surplus in networked markets.

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Item Type: Article
Subject Areas: Economics
Funder Name: Keynes Fund for Applied Research, National Research Foundation of Korea, European Research Council, Leverhume Trust
Date Deposited: 18 Oct 2019 11:05
Date of first compliant deposit: 12 Feb 2021
Last Modified: 28 May 2024 00:43

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