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Random encounters and information diffusion about markets

Author

Listed:
  • GABSZEWICZ Jean,

    (CORE, Université catholique de Louvain)

  • MARINI Marco,

    (Universita di Roma La Sapienza)

  • ZANAJ Skerdilajda,

    (Université du Luxembourg)

Abstract

International openness enhances social interaction between citizens of different countries or regions and vice versa. Social exchanges, in turn, increase trade flows between countries and influence markets and prices. We analyze the increased mobility that follows from openness between two countries and its effects on market outcomes. The primary result of our analysis shows that at the limit, market prices tend to align with the duopoly solution. Nonetheless, this convergence can take two different paths depending on the size asymmetry between countries.

Suggested Citation

  • GABSZEWICZ Jean, & MARINI Marco, & ZANAJ Skerdilajda,, 2018. "Random encounters and information diffusion about markets," LIDAM Discussion Papers CORE 2018027, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2018027
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Jean J. Gabszewicz & Marco A. Marini & Skerdilajda Zanaj, 2023. "Random encounters and information diffusion about product quality," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 32(2), pages 348-376, April.
    2. Ceccantoni, Giulia & Tarola, Ornella & Zanaj, Skerdilajda, 2018. "Green Consumption and Relative Preferences in a Vertically Differentiated International Oligopoly," Ecological Economics, Elsevier, vol. 149(C), pages 129-139.
    3. Lu, Xinqing & Zhu, Erpu & Campbell, Loyle & Hafner, Manfred & Noussan, Michel & Raimondi, Pier Paolo, 2021. "Comparison between China, the EU and the US's climate and energy governance: How policies are made and implemented at different levels," FEEM Working Papers 317745, Fondazione Eni Enrico Mattei (FEEM).
    4. Xinqing Lu & Erpu Zhu & Loyle Campbell & Manfred Hafner & Michel Noussan & Pier Paolo Raimondi, 2021. "Comparison between China, the EU and the US’s climate and energy governance: How policies are made and implemented at different levels," Working Papers 2021.34, Fondazione Eni Enrico Mattei.

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    More about this item

    Keywords

    vertically differentiated markets; information; diffusion; openness;
    All these keywords.

    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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