Bilateral Trading in Networks

Daniele Condorelli and Andrea Galeotti

Economics Discussion Papers from University of Essex, Department of Economics

Abstract: We study an incomplete-information model of sequential bargaining for a single object, with the novel feature that agents are located in a network. In each round of trade, the current owner of the object either consumes it or makes a take-it-or-leave-it offer to some connected trader. Traders may buy in order to consume or to resale to others. We show that the equilibrium price dynamics is non-monotone and that traders that intermediate the object arise endogenously and attain a pro t. We also provide insights on how traders' equilibrium payoffs depend on their location in the network.

Keywords: HB (search for similar items in EconPapers)
Date: 2012-01-16
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Citations: View citations in EconPapers (13)

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Journal Article: Bilateral Trading in Networks (2017)
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