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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.

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

Full Text: https://doi.org/10.1093/jeea/jvw016



Papers and Publications



Recent Publications


Cesarani, D., Lindqvist, E., Ostling, R. and Wallace, B. Wealth, health, and child development: evidence from administrative data on Swedish lottery players Quarterly Journal of Economics [2016]

Munshi, K. and Rosenzweig, M. Networks and misallocation: insurance, migration, and the rural-urban wage gap American Economic Review [2016]

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

Choi, S., Galeotti, A and Goyal, S. Trading in networks Journal of the European Economic Association [2017]