Random Encounters and Information Diffusion about Markets

Jean Gabszewicz, Marco Marini and Skerdilajda Zanaj

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

Abstract: International openness enhances social interactions between citizens of different countries or regions, and vice versa. Social exchanges in turn increase the trade flows between coun- tries. Accordingly, these meetings influence markets and prices. We analyze the interaction between the increased mobility following openness between two different countries and the corresponding effects on market outcomes. The main result of our analysis consists in show- ing that market prices tend at the limit to align with the duopoly solution. Nonetheless, this convergence can take two different paths depending on the size asymmetry between the 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: 2017
New Economics Papers: this item is included in nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Random Encounters and Information Diffusion about Product Quality (2021)
Working Paper: Random encounters and information diffusion about markets (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:luc:wpaper:17-24

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