Stability and Competitive Equilibrium in Trading Networks
We introduce a model in which agents in a network can trade via bilateral contracts. We find that when continuous transfers are allowed and utilities are quasi-linear, the full substitutability of preferences is sufficient to guarantee the existence of stable outcomes for any underlying network stru...
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| Veröffentlicht in: | The Journal of political economy 2013-10, Vol.121 (5), p.966-1005 |
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| Hauptverfasser: | , , , , |
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| container_end_page | 1005 |
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| container_issue | 5 |
| container_start_page | 966 |
| container_title | The Journal of political economy |
| container_volume | 121 |
| creator | Hatfield, John William Kominers, Scott Duke Nichifor, Alexandru Ostrovsky, Michael Westkamp, Alexander |
| description | We introduce a model in which agents in a network can trade via bilateral contracts. We find that when continuous transfers are allowed and utilities are quasi-linear, the full substitutability of preferences is sufficient to guarantee the existence of stable outcomes for any underlying network structure. Furthermore, the set of stable outcomes is essentially equivalent to the set of competitive equilibria, and all stable outcomes are in the core and are efficient. By contrast, for any domain of preferences strictly larger than that of full substitutability, the existence of stable outcomes and competitive equilibria cannot be guaranteed. |
| doi_str_mv | 10.1086/673402 |
| format | Article |
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| ispartof | The Journal of political economy, 2013-10, Vol.121 (5), p.966-1005 |
| issn | 0022-3808 1537-534X |
| language | eng |
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| source | Jstor Complete Legacy; University of Chicago Press Journals (Full run); Business Source Complete |
| subjects | Agency theory Automobiles Contracts Decision analysis Economic agents Economic competition Economic models Economic theory Economic utility Equilibrium prices Market economies Market equilibrium Political economy Studies Trade Utility functions |
| title | Stability and Competitive Equilibrium in Trading Networks |
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