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Matching structure and bargaining outcomes in buyer–seller networks

Arnold Polanski
2015 Social Choice and Welfare  
We examine the relationship between the matching structure of a bipartite (buyer-seller) network and the (expected) shares of the unit surplus that each connected pair in this network can create.  ...  This theorem characterizes the structure of maximum matchings in an undirected graph.  ...  Introduction In this note, we examine the relationship between the matching structure of a bipartite (buyer-seller) network and the expected shares of the unit surplus that each connected pair in this  ... 
doi:10.1007/s00355-015-0935-y fatcat:mgmlynlxuvavxd5jrd2e2r3dce

Inefficiencies in Networked Markets

Matthew Elliott
2014 Social Science Research Network  
In many markets, relationship specific investments are necessary for trade. These formed relationships constitute a networked market in which not all buyers can trade with all sellers.  ...  We show that networked markets can be decomposed to identify how alternative trading opportunities affect who trades with whom and at what price.  ...  matched to seller j if and only if seller j is matched to buyer i . 13 Although in principle a buyer can multihome and buy from multiple sellers, such outcomes are typically unstable.  ... 
doi:10.2139/ssrn.2445658 fatcat:6ilqah65l5cfrgictdamobioqi

A Network-Based Asymmetric Nash Bargaining Solution [chapter]

Edoardo Gallo
2008 Lecture Notes in Computer Science  
This paper presents an evolutionary bargaining model between two groups of buyers and sellers.  ...  One buyer and one seller are randomly matched to play the Nash demand game: they choose a best reply based on information about past bargains coming from other members of their group.  ...  network structure.  ... 
doi:10.1007/978-3-540-92185-1_38 fatcat:4r37kvdcajem7ktvobmwp6dlv4

Inefficiencies in Networked Markets

Matthew Elliott
2015 American Economic Journal: Microeconomics  
In some markets a buyer and seller must make different, separate investments to trade, while in others investments are jointly negotiated.  ...  In many markets, relationship specific investments are necessary for trade. These formed relationships constitute a networked market in which not all buyers can trade with all sellers.  ...  to seller j if and only if seller j is matched to buyer i. 13 Although in principle a buyer can multihome and buy from multiple sellers, such outcomes are 11 Without loss of generality, sellers' values  ... 
doi:10.1257/mic.20130098 fatcat:4yc4xpukbvgjlpjxjv4seycqsq

Formation of Bargaining Networks Via Link Sharing

Sofia Priazhkina, Frank H. Page
2014 Social Science Research Network  
second stage, sellers and buyers bargain for the product.  ...  When the number of buyers exceeds number of sellers, bargaining privileges of sellers over buyers and a low sharing transfer are required for the equilibrium to exist.  ...  The structure of the network has a strong eect on the equilibrium volume and prices. Networks restrict traders to only local operation and create matching frictions for buyers and sellers.  ... 
doi:10.2139/ssrn.2446428 fatcat:kib46yxmxvfyddmgsgwzkjqq3a

Bargaining and network structure: An experiment

Gary Charness, Margarida Corominas-Bosch, Guillaume R. Fréchette
2007 Journal of Economic Theory  
We consider bargaining in a bipartite network of buyers and sellers, who can only trade with the limited number of people with whom they are connected.  ...  We perform an experimental test of a graph-theoretic model that yields unique predictions about equilibrium prices for the networks in our sessions.  ...  Fréchette's research was partially supported by the Center for Experimental Social Science and the C.V. Starr Center.  ... 
doi:10.1016/j.jet.2005.06.009 fatcat:dlwwn6p2x5ecphfs65jgomqyby

Markets, Bargaining, and Networks with Heterogeneous Agents

Arnold Polanski, Fernando Vega-Redondo
2013 Social Science Research Network  
The paper proposes an intertemporal model of bargaining among heterogeneous buyers and sellers placed on a bipartite network.  ...  We explain that such incompatibility is not only due to buyer/seller heterogeneity but is also caused by the incentives underlying network formation in a trading context.  ...  (b) Buyers and sellers have heterogeneous valuations and costs and their matching possibilities are restricted to lie in a bipartite (buyer-seller) trading network.  ... 
doi:10.2139/ssrn.2218605 fatcat:qtl4f2khnrfg7puol3wevpamfm

Bargaining and Network Structure: An Experiment

Gary Charness, Margarida Corominas-Bosch, Guillaume R. Frechette
2000 Social Science Research Network  
We consider bargaining in a bipartite network of buyers and sellers, who can only trade with the limited number of people with whom they are connected.  ...  We perform an experimental test of a graph-theoretic model that yields unique predictions about equilibrium prices for the networks in our sessions.  ...  Fréchette's research was partially supported by the Center for Experimental Social Science and the C.V. Starr Center.  ... 
doi:10.2139/ssrn.248669 fatcat:qaz4fzbvgbcp3hvaj4x3ohe5qe

Intermediation in Networks

Jan-Peter Siedlarek
2012 Social Science Research Network  
This paper studies bargaining and exchange with intermediation in a network setting.  ...  Introduction This paper presents a model of bargaining and exchange to study intermediation in networks.  ...  Depending on the network N for each given buyer-seller pair there may be several feasible routes. Matching and bargaining protocol The model operates in discrete time.  ... 
doi:10.2139/ssrn.2120455 fatcat:npu24mnvyvge5dbmwozihmoo4m

Intermediation in Networks

Jan-Peter Siedlarek
2015 Social Science Research Network  
This paper studies bargaining and exchange with intermediation in a network setting.  ...  Introduction This paper presents a model of bargaining and exchange to study intermediation in networks.  ...  Depending on the network N for each given buyer-seller pair there may be several feasible routes. Matching and bargaining protocol The model operates in discrete time.  ... 
doi:10.2139/ssrn.2672194 fatcat:4vlrpa5mnvbetfpc77bsyyfxdi

Bargaining Frictions in Trading Networks

Arnold Polanski, Fernando Vega-Redondo
2017 The B.E. Journal of Theoretical Economics  
Here we focus on frictions that can be modeled as the bargaining constraints induced by an incomplete trading network. In this context, the  ...  In the real world, however, arbitrage possibilities are often severely restricted and this may lead to substantial price heterogeneity.  ...  Bargaining proceeds over discrete periods and, in every one of them, some buyers and sellers are randomly matched in pairs that are consistent with the given trading network.  ... 
doi:10.1515/bejte-2016-0089 fatcat:w2d3gvpa55fztiqocl4bqxqshq

Bargaining and Delay in Trading Networks

Mikel Bedayo, Ana Carmen Mauleon, Vincent J. Vannetelbosch
2013 Social Science Research Network  
Then, a seller and a buyer are randomly selected among the agents to bargain through a chain of intermediaries.  ...  We determine both the trading path and the allocation of the surplus among the seller, the buyer and the intermediaries at equilibrium.  ...  Acknowledgments We thank Francis Bloch and Matt Jackson for useful comments and suggestions. We also thank seminar audiences and conference participants at Bilbao  ... 
doi:10.2139/ssrn.2210328 fatcat:kqjh3y77gveahl6ihjkhliaevi

The effect of link costs on simple buyer–seller networks

Gönül Doğan, Marcel van Assen, Jan Potters
2013 Games and Economic Behavior  
We examine experimentally how link costs affect the formation of links between a single seller and two potential buyers as well as the ensuing bargaining.  ...  Theory predicts that link costs lead to less competitive networks, with one link rather than two links, and that link costs do not affect the bargaining outcomes conditional on the network.  ...  'buyer' and 'seller' for the players in our network game.  ... 
doi:10.1016/j.geb.2012.10.006 fatcat:g4shdtgbsvb6rpa3mqztarupou

On the Formation of Buyer-Seller Relationships When Product Quality is Perfectly Observable

Yann Bramoulle, John A. List, Michael K. Price
2007 Social Science Research Network  
Interestingly, the quantitative impact of relationship on overall market efficiency depends critically on the extent to which market structure affects the matching of buyers and sellers that could profitably  ...  In certain important cases, a greater numer of buyer-seller relationships can reduce market efficiency.  ...  Second, sellers choose one buyer among those visitors and the pair of matched buyers and sellers bargain. If bargaining is successful, then a trade is realized.  ... 
doi:10.2139/ssrn.1028541 fatcat:x5ehvprk7zec3mnkmkjcvgbeg4

Inventories and Public Information in Private Negotiation: A Laboratory Market Study

Dale J. Menkhaus, Owen R. Phillips, Alla V. Yakunina
2009 American Journal of Agricultural Economics  
There are a limited number of bargaining rounds or matches between buyer and seller pairs. Sellers hold a perishable inventory before negotiations begin.  ...  We find that knowledge of trades, along with price, improves the coordination and bargaining position of buyers.  ...  Buyers and sellers were randomly matched in each of the private negotiation bargaining rounds.  ... 
doi:10.1111/j.1467-8276.2009.01253.x fatcat:wfj2pqwuwjabxioqobc5q3sivi
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