Trading in Networks: Theory and Experiments

Syngjoo Choi, Andrea Galeotti and Sanjeev Goyal

Journal of the European Economic Association, 2017, vol. 15, issue 4, 784-817

Abstract: 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.

JEL-codes: C70 C71 C91 C92 D40 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (30)

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Working Paper: Trading in Networks: Theory and Experiments (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:oup:jeurec:v:15:y:2017:i:4:p:784-817.

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