Dynamics of price formation on complex networks.

ABSTRACT: Networks mediate our economic interactions. From spatial networks representing transportation routes, to more abstract networks of similarity among products, we interact, trade, and compete over networks with a complex structure. Nevertheless, classical economic models of how prices are formed under competition, such as the Edgeworth and the Hotelling models, completely neglect the network structure of real markets. Here, we introduce a dynamical model of price formation, where sellers and buyers are placed on the nodes of a network with any arbitrarily complex topology. Buyers are modeled as random walkers with perfect or limited information about the market, and their distribution depends on the prices and positions of sellers. Concurrently, sellers dynamically adjust their prices to max

SUBMITTER: Civilini A 

PROVIDER: S-EPMC11783569 | biostudies-literature | 2025 Jan

REPOSITORIES: biostudies-literature