Publications [#238443] of Rachel Kranton

Journal Articles

1. with Kranton, RE; Minehart, DF, A theory of buyer-seller networks, American Economic Review, vol. 91 no. 3 (January, 2001), pp. 485-508 [repository], [doi]
   (last updated on 2022/05/27)

   Abstract:
   This paper introduces a new model of exchange: networks, rather than markets, of buyers and sellers. It begins with the empirically motivated premise that a buyer and seller must have a relationship, a "link," to exchange goods. Networks - buyers, sellers, and the pattern of links connecting them - are common exchange environments. This paper develops a methodology to study network structures and explains why agents may form networks. In a model that captures characteristics of a variety of industries, the paper shows that buyers and sellers, acting strategically in their own self-interests, can form the network structures that maximize overall welfare.