Chain stability in trading networks

John William Hatfield, Scott Duke Kominers, Alexandru Nichifor, Michael Ostrovsky, Alexander Westkamp

In a general model of trading networks with bilateral contracts, we propose a suitably adapted chain stability concept that plays the same role as pairwise stability in two-sided settings. We show that chain stability is equivalent to stability if all agents' preferences are jointly fully substitutable and satisfy the Laws of Aggregate Supply and Demand. In the special case of trading networks with transferable utility, an outcome is consistent with competitive equilibrium if and only if it is chain stable.

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Year of publication:	2021
Authors:	Hatfield, John William ; Kominers, Scott Duke ; Nichifor, Alexandru ; Ostrovsky, Michael ; Westkamp, Alexander
Published in:	Theoretical economics : TE ; an open access journal in economic theory. - Toronto : [Verlag nicht ermittelbar], ISSN 1555-7561, ZDB-ID 2220447-7. - Vol. 16.2021, 1, p. 197-234
Subject:	Matching \| trading networks \| chain stability \| stability \| competitive equilibria \| full substitutability \| Laws of Aggregate Supply and Demand \| Netzwerk \| Network \| Theorie \| Theory \| Marktmechanismus \| Market mechanism \| Unternehmensnetzwerk \| Business network \| Stabilität eines Gleichgewichts \| Stability of equilibrium \| Lieferkette \| Supply chain

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Type of publication:	Article
Type of publication (narrower categories):	Aufsatz in Zeitschrift ; Article in journal
Language:	English
Other identifiers:	10.3982/TE3839 [DOI] hdl:10419/253496 [Handle]
Classification:	C78 - Bargaining Theory; Matching Theory ; D85 - Network Formation ; L14 - Transactional Relationships; Contracts and Reputation; Networks
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10012415626