Trading in Networks: Theory and Experiments
Syngjoo Choi (),
Andrea Galeotti and
Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge
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.
Keywords: Intermediation; competition; market power; double marginalization. (search for similar items in EconPapers)
JEL-codes: C70 C71 C91 C92 D40 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-exp, nep-gth, nep-hpe, nep-net and nep-soc
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Journal Article: Trading in Networks: Theory and Experiments (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:1457
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