Price Variation in a Bipartite Exchange Network
- Cite this paper as:
- Gradwohl R. (2008) Price Variation in a Bipartite Exchange Network. In: Monien B., Schroeder UP. (eds) Algorithmic Game Theory. SAGT 2008. Lecture Notes in Computer Science, vol 4997. Springer, Berlin, Heidelberg
We analyze the variation of prices in a model of an exchange market introduced by Kakade et al. , in which buyers and sellers are represented by vertices of a bipartite graph and trade is allowed only between neighbors. In this model the graph is generated probabilistically, and each buyer is connected via preferential attachment to v sellers. We show that even though the tail of the degree distribution of the sellers gets heavier as v increases, the prices at equilibrium decrease exponentially with v. This strengthens the intuition that as the number of vendors available to buyers increases, the prices of goods decrease.
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