ORCID
Fabien Mercier 0000-0002-9523-4277
Abstract
This paper studies the stability, equilibrium and efficiency of directed networks of trade intermediaries under a rule of equi-repartition of profits. This equi-repartition rule, although simple and natural, introduces complex topologic considerations from players. Core-periphery structures can arise endogenously and result in stable networks even assuming complete homogeneity of all agents in the network. The concept of network partition is introduced to provide examples of networks that could be seen as arising from the linking up of a set of disjoint networks in an endogenous manner. From an aggregate welfare perspective as well as sometimes from an individual perspective, leaving the linking up of those individually effi cient networks to each individual agent can result in an ineffi cient aggregate network, even if taken in isolation each pre-existing network is efficient.
Recommended Citation
Mercier, Fabien
(2016)
"Intermediary networks under the rule
of equi-repartition of profi ts,"
Journal of Banking and Financial Economics: Vol. 2016:
No.
5, Article 3.
DOI: 10.7172/2353-6845.jbfe.2016.1.2
Available at:
https://press.wz.uw.edu.pl/jbfe/vol2016/iss5/3
First Page
39
Last Page
63
Page Count
63
Received Date
University of Warsaw
Revised Date
1 June 2015
Accept Date
14 September 2015
Online Available Date
16 November 2015
DOI
10.7172/2353-6845.jbfe.2016.1.2
JEL Code
D85; G10; L14
Publisher
16 November 2015