Random encounters and information diffusion about markets

Jean Gabszewicz, Marco Marini and Skerdilajda Zanaj

No 2018027, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: International openness enhances social interaction between citizens of different countries or regions and vice versa. Social exchanges, in turn, increase trade flows between countries and influence markets and prices. We analyze the increased mobility that follows from openness between two countries and its effects on market outcomes. The primary result of our analysis shows that at the limit, market prices tend to align with the duopoly solution. Nonetheless, this convergence can take two different paths depending on the size asymmetry between countries.

Keywords: vertically differentiated markets; information; diffusion; openness (search for similar items in EconPapers)
JEL-codes: D42 D43 L1 L12 L13 L41 (search for similar items in EconPapers)
Date: 2018-09-05
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Related works:
Working Paper: Random Encounters and Information Diffusion about Markets (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2018027

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