Pricing in social networks

Bloch, Francis; Quérou, Nicolas

doi:10.1016/j.geb.2013.03.006

Cited by 184 publications

(133 citation statements)

References 16 publications

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“…From the technical viewpoint, our approach is related to literature on games on networks (Jackson and Zenou, 2015) where the network is explicitly modeled as a graph and the payoff functions There is also a growing literature that models price competition between firms with an explicit network. Two important papers in this literature are that of Bloch and Quérou (2013) and Candogan et al (2012). 6 Bloch and Quérou (2013) study optimal monopoly pricing in the presence of network externalities across consumers.…”

Section: Related Literaturementioning

confidence: 99%

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Price Competition in Product Variety Networks

Ushchev¹,

Zénou

2016

SSRN Journal

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We develop a product-differentiated model where the product space is a network defined as a set of varieties (nodes) linked by their degrees of substituability (edges). We also locate consumers into this network, so that the location of each consumer (node) corresponds to her "ideal" variety. We show that, even though prices need not to be strategic complements, there exists a unique Nash equilibrium in the price game among firms. Equilibrium prices are determined by both firms' sign-alternating Bonacich centralities and the average willingness to pay across consumers. They both hinge on the network structure of the firm-product space. We also investigate how local product differentiation and the spatial discount factor affect the equilibrium prices. We show that these effects non-trivially depend on the network structure. In particular, we find that, in a star-shaped network, the firm located in the star node does not always enjoy higher monopoly power than the peripheral firms.

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Section: Related Literaturementioning

confidence: 99%

“…Just like in the preceding subsection, we are able to state clear-cut analytical results for low values of , while otherwise we proceed with simulations. 14 …”

Section: A Change In the Spatial Discount Factor mentioning

confidence: 99%

Price Competition in Product Variety Networks

Ushchev¹,

Zénou

2016

SSRN Journal

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“…As noted on the basis of the survival ratios, there is indeed an important reconfiguration of the graph on this occasion. Then, we propose the use of a new measure of centrality that was introduced by Bonacich in 1987 for social networks and recently used by Bloch and Quérou (2013). To the best of our knowledge, this is the first time that such a method has been employed in finance.…”

Section: D$subprime$crisis$ (B)mentioning

confidence: 99%

Integration of Commodity Derivative Markets: Has It Gone Too Far?

Lautier

Ling

Raynaud

2015

Commodities, Energy and Environmental Finance

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We examine the impact of two financial crises on commodity derivative markets: the subprime crisis and the bankruptcy of Lehman Brothers. These crises are "external" to the commodity markets because they occurred in the financial sphere. Still, because commodity markets are now highly integrated with each other and with other financial markets, such events could have had an impact. In order to fully comprehend this possible impact, we rely on tools inspired by the graph theory that allow for the study of large databases. We examine the daily price fluctuations recorded in 14 derivative markets from 2000 to 2009 in three dimensions: the observation time, the space dimension -the same underlying asset can be traded simultaneously in two different places -and the maturity of the transactions. We perform an event study in which we first focus on the efficiency of the price shock's transmission to the commodity markets during the crises. Then we concentrate on whether the paths of shock transmission are modified. Finally, relying on the measure proposed by Bonacich (1987) for social networks, we focus on whether the centrality of the price system changes. JEL Codes: E44, F15, G01, Q02, Q40

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“…Computational complexities and approximation algorithms for marketing problems among rebels are discussed in [8]. For more research on social network pricing and marketing problems from the perspective of algorithmic game theory, we refer the reader to [2,6,7,10,15].…”

Section: Related Workmentioning

confidence: 99%

The fashion game: Network extension of Matching Pennies

Cao

Yang

2014

Theoretical Computer Science

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Abstract. It is impossible, in general, to extend an asymmetric twoplayer game to networks, because there must be two populations, the row one and the column one, but we do not know how to define innerpopulation interactions. This is not the case for Matching Pennies, as we can interpret the row player as a conformist, who prefers to coordinate her opponent's action, while the column player can be interpreted as a rebel, who likes to anti-coordinate. Therefore we can naturally define the interaction between two conformists as the coordination game, and that between two rebels as the anti-coordination game. It turns out that the above network extension of Matching Pennies can be used to investigate the phenomenon of fashion, and thus it is named as the fashion game. The fashion game possesses an obvious mixed Nash equilibrium, yet we are especially interested in pure Nash equilibrium (PNE for short), whose existence cannot be guaranteed. In this paper, we focus on the PNE testing problem, namely given an instance of the fashion game, answer whether it possesses a PNE or not. Our first result is on the negative side: PNE testing, in general, is hard. For the PNE testing problem restricted to several special structures, i.e. lines, rings, complete graphs and trees, either a simple characterization or an efficient algorithm is provided.

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Pricing in social networks

Cited by 184 publications

References 16 publications

Price Competition in Product Variety Networks

Price Competition in Product Variety Networks

Integration of Commodity Derivative Markets: Has It Gone Too Far?

The fashion game: Network extension of Matching Pennies

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