Networks and markets: The dynamic impacts of information, matching and transaction costs on trade

Arbeitspapier

The purpose of this paper is to explore strategic incentives to use trade networks rather than markets and shed light on the dynamic relation between the two distinct trading systems: a formal system of markets and a issues in the infinitely repeated multi-player prisoner's dilemma gamedecentralised system of networks. We investigate the with random matching. The existing literature emphasises the importance of information transmission in sustaining long-run cooperation in repeated personal transactions under perfect observability. By contrast, we show that a folk theorem may hold if we change the way traders are matched, without introducing any information sharing. We also examine different stages of the evolution of trading system. The study states conditions under which agents prefer to trade on networks rather than in markets.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CeDEx Discussion Paper Series ; No. 2010-07

Classification and Topics

• Classification: Wirtschaft ; Trade: General ; Stochastic and Dynamic Games; Evolutionary Games; Repeated Games ; Institutions: Design, Formation, Operations, and Impact
• Subject: repeated trade ; moral hazard ; matching ; transaction costs ; networks ; institutions ; Netzwerk ; Handel ; Matching ; Transaktionskosten ; Risiko ; Spieltheorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kumagai, Yuki
• Event: Veröffentlichung
• (who): The University of Nottingham, Centre for Decision Research and Experimental Economics (CeDEx)
• (where): Nottingham
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/49683
• Last update: 10.03.2025, 11:42 AM CET