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Market interaction structure and equilibrium price heterogeneity in monopolistic competition

Tamás Sebestyén & Balázs Szabó

Netnomics2022https://doi.org/10.1007/s11066-022-09155-5article
AJG 1ABDC C
Weight
0.37

What the paper says

Abstract This paper investigates the extent to which the structure of the interaction network between suppliers and buyers affects equilibrium price heterogeneity. An incomplete interaction structure leads to uneven information flows and different information bases for consumers which is then taken into account by price setting producers. This results in heterogenous prices even if producers are identical in all other respects. The complete interaction network serves as a special case resembling standard monopolistic competition models. We show that a slight deviation from the complete network results in heterogeneous prices, although this heterogeneity becomes economically significant only under sparse or small networks. Sparsity as the main determinant of price heterogeneity dominates network asymmetry: relatively dense networks show minimal price dispersion even if its degree distribution follows a power law.

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https://doi.org/https://doi.org/10.1007/s11066-022-09155-5

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@article{tamás2022,
  title        = {{Market interaction structure and equilibrium price heterogeneity in monopolistic competition}},
  author       = {Tamás Sebestyén & Balázs Szabó},
  journal      = {Netnomics},
  year         = {2022},
  doi          = {https://doi.org/https://doi.org/10.1007/s11066-022-09155-5},
}

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Market interaction structure and equilibrium price heterogeneity in monopolistic competition

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Evidence weight

0.37

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.07 × 0.4 = 0.03
M · momentum0.80 × 0.15 = 0.12
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.