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Faculty of Economics

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Choi, S., Galeotti, A and Goyal, S.

Trading in networks

Journal of the European Economic Association

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 $\textit{node criticality}$ as an organizing principle for understanding pricing, efficiency and the division of surplus in networked markets.

Keywords: Intermediation, Competition, Coordination

JEL Codes: C70, C71, C91, C92, D40

Publisher's Link: https://doi.org/10.1093/jeea/jvw016



Cambridge Working Paper in Economics Version of Paper: Trading in Networks: Theory and Experiments, Cho, S., Galeotti, A. and Goyal, S., (2014)

Papers and Publications



Recent Publications


Elliott, M. and Golub, B. A network approach to public goods accepted, Journal of Political Economy [2018]

Jochmans, K., and Weidner, M. Fixed-Effect Regressions on Network Data Econometrica, forthcoming [2019]

Onatski, A. and Wang, C. Alternative Asymptotics for Cointegration Tests in Large VARs Econometrica, forthcoming [2018]