Price Variation in a Bipartite Exchange Network

  • Ronen Gradwohl
Part of the Lecture Notes in Computer Science book series (LNCS, volume 4997)

Abstract

We analyze the variation of prices in a model of an exchange market introduced by Kakade et al. [11], 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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Copyright information

© Springer-Verlag Berlin Heidelberg 2008

Authors and Affiliations

  • Ronen Gradwohl
    • 1
  1. 1.Department of Computer Science and Applied MathematicsThe Weizmann Institute of ScienceRehovotIsrael

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