Price Variation in a Bipartite Exchange Network, Proceedings of the 2008 International Symposium on Algorithmic Game Theory
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.
Gradwohl, Ronen. 2008. Price Variation in a Bipartite Exchange Network. Proceedings of the 2008 International Symposium on Algorithmic Game Theory. 1: 109-120.