Blot Post #2: Trading Networks
Article: https://www.sciencedirect.com/science/article/pii/S0899825608002182
This study essentially models a game in which buyers, sellers, and traders trade based on a graph that represents the buyers and sellers access to traders. This game is created to determine dominant strategy in situations where buyers and sellers have different accesses to trading and therefore different amounts of power in the market. The study shows that this resulting game described above always has a perfect Nash equilibrium, and the equilibrium most efficiently allocates goods based on needs and access. Furthermore the study also quantifies the amount of competition for traders based on how “essential” their connections are.
This connects to the trading networks that we’re discussing as the study is analyzing a trading network game based on buyers sellers and traders and is quantifying competition and finding Nash equilibrium for it.