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Two Experiments on Trading Information Goods in a Network

Author

Listed:
  • Nobuyuki Hanaki
  • Yutaka Kayaba
  • Jun Maekawa
  • Hitoshi Matsushima

Abstract

We examine the impact of a cycle path on the trading of a copyable information good in a network experimentally. A cycle path in a network allows a buyer to become a reseller who can compete against existing sellers by replicating the good. A theoretical prediction considers that the price of the information good, even with the first transaction where there is not yet a reseller competing with the original seller, will be lower in networks with a cycle path than otherwise. However, our experiment reveals that the observed price for the first transaction is significantly higher in networks with a cycle path. An additional experiment that enhances competition also does not support the theoretical prediction.

Suggested Citation

  • Nobuyuki Hanaki & Yutaka Kayaba & Jun Maekawa & Hitoshi Matsushima, 2021. "Two Experiments on Trading Information Goods in a Network," ISER Discussion Paper 1151r, Institute of Social and Economic Research, Osaka University, revised Oct 2023.
    • Handle: RePEc:dpr:wpaper:1151r
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    File URL: https://www.iser.osaka-u.ac.jp/library/dp/2021/DP1151R.pdf
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    References listed on IDEAS

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