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The Strategic Exploitation of Limited Information and Opportunity in Networked Markets

The Strategic Exploitation of Limited Information and Opportunity in Networked Markets
The Strategic Exploitation of Limited Information and Opportunity in Networked Markets
This paper studies the effect of constraining interactions within a market. A model is analysed in which boundedly rational agents trade with and gather information from their neighbours within a trade network. It is demonstrated that a trader’s ability to profit and to identify the equilibrium price is positively correlated with its degree of connectivity within the market. Where traders differ in their number of potential trading partners, well-connected traders are found to benefit from aggressive trading behaviour.Where information propagation is constrained by the topology of the trade network, connectedness affects the nature of the strategies employed.
295-315
Ladley, Dan
eadd9d0e-cba3-48d3-9e4d-61fe9a5ab1bd
Bullock, Seth
2ad576e4-56b8-4f31-84e0-51bd0b7a1cd3
Ladley, Dan
eadd9d0e-cba3-48d3-9e4d-61fe9a5ab1bd
Bullock, Seth
2ad576e4-56b8-4f31-84e0-51bd0b7a1cd3

Ladley, Dan and Bullock, Seth (2008) The Strategic Exploitation of Limited Information and Opportunity in Networked Markets. Computational Economics, 32 (3), 295-315.

Record type: Article

Abstract

This paper studies the effect of constraining interactions within a market. A model is analysed in which boundedly rational agents trade with and gather information from their neighbours within a trade network. It is demonstrated that a trader’s ability to profit and to identify the equilibrium price is positively correlated with its degree of connectivity within the market. Where traders differ in their number of potential trading partners, well-connected traders are found to benefit from aggressive trading behaviour.Where information propagation is constrained by the topology of the trade network, connectedness affects the nature of the strategies employed.

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More information

Published date: 2008
Organisations: Agents, Interactions & Complexity

Identifiers

Local EPrints ID: 266763
URI: http://eprints.soton.ac.uk/id/eprint/266763
PURE UUID: da433d31-390c-4028-86bf-506fda95486c

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Date deposited: 07 Oct 2008 13:47
Last modified: 19 Jul 2019 22:20

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