Stability in Trading Networks

Introductory Workshop: Mathematics and Computer Science of Market and Mechanism Design September 11, 2023 - September 15, 2023

September 14, 2023 (09:30 AM PDT - 10:30 AM PDT)

Speaker(s): Zsuzsanna Jankó (Corvinus University of Budapest)
Location: SLMath: Eisenbud Auditorium, Online/Virtual

Primary Mathematics Subject Classification No Primary AMS MSC

Secondary Mathematics Subject Classification No Secondary AMS MSC

Video

Stability in Trading Networks

Abstract

We consider a model of matching in trading networks in which firms can enter into bilateral contracts. In trading networks, stable outcomes, which are immune to deviations of arbitrary sets of firms, may not exist. We define a solution concept called trail-stability. Trail-stable outcomes are immune to consecutive, pairwise deviations between linked firms. We show that any trading network with bilateral contracts has a trail-stable outcome whenever firms’ choice functions satisfy the full substitutability condition.

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Stability in Trading Networks

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