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arXiv · 2008.09757

Constrained Trading Networks

Can Kizilkale·Rakesh Vohra
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Abstract

Trades based on bilateral (indivisible) contracts can be represented by a network. Vertices correspond to agents while arcs represent the non-price elements of a bilateral contract. Given prices for each arc, agents choose the incident arcs that maximize their utility. We enlarge the model to allow for polymatroidal constraints on the set of contracts that may be traded which can be interpreted as modeling limited one for-one substitution. We show that for two-sided markets there exists a competitive equilibrium however for multi-sided markets this may not be possible.

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Can Kizilkale, Rakesh Vohra. 2020-08-22. Constrained Trading Networks. https://arxiv.org/abs/2008.09757

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