Two Experiments on Trading Information Goods in a Network

Nobuyuki Hanaki, Yutaka Kayaba, Jun Maekawa and Hitoshi Matsushima

ISER Discussion Paper from Institute of Social and Economic Research, Osaka University

Abstract: We examine the impact of a cycle path on the trading of a copyable information good in a network experimentally. A cycle path in a network allows a buyer to become a reseller who can compete against existing sellers by replicating the good. A theoretical prediction considers that the price of the information good, even with the first transaction where there is not yet a reseller competing with the original seller, will be lower in networks with a cycle path than otherwise. However, our experiment reveals that the observed price for the first transaction is significantly higher in networks with a cycle path. An additional experiment that enhances competition also does not support the theoretical prediction.

Date: 2021-12, Revised 2023-10
New Economics Papers: this item is included in nep-com, nep-exp, nep-gth and nep-net
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Journal Article: Two experiments on trading information goods in a network (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:dpr:wpaper:1151r

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