A decentralized model of information pricing in networks

Polanski, Arnold ORCID: https://orcid.org/0000-0001-9146-6364 (2007) A decentralized model of information pricing in networks. Journal of Economic Theory, 136 (1). pp. 497-512.

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We propose a recursive method of pricing an information good in a network of holders and demanders of this good. The prices are determined via a unique equilibrium outcome in a sequence of bilateral bargaining games that are played by connected agents. If the information is a homogenous, non-depreciating good without network effects, we derive explicit formulae which elucidate the role of the link pattern among the players. Particularly, we find out that the equilibrium price is intimately related to the existence of cycles in the network: it is zero if a cycle covers the trading pair and it is proportional to the direct and indirect utility that the good generates otherwise.

Item Type: Article
Faculty \ School: Faculty of Social Sciences > School of Economics
UEA Research Groups: Faculty of Social Sciences > Research Groups > Economic Theory
Faculty of Social Sciences > Research Groups > Applied Econometrics And Finance
Depositing User: Julie Frith
Date Deposited: 18 Jan 2013 14:24
Last Modified: 02 Feb 2023 10:30
URI: https://ueaeprints.uea.ac.uk/id/eprint/40863
DOI: 10.1016/j.jet.2006.09.001

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