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Bilateral Trading in Networks

Condorelli, Daniele and Galeotti, Andrea (2012) Bilateral Trading in Networks. Working Paper. University of Essex, Department of Economics, Economics Discussion Papers, Colchester. (Unpublished)

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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.

Item Type: Monograph (Working Paper)
Uncontrolled Keywords: HB;
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Elements
Date Deposited: 06 Feb 2019 14:06
Last Modified: 06 Feb 2019 14:15
URI: http://repository.essex.ac.uk/id/eprint/24004

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