Network structures of a centralized and a decentralized market. A direct comparison.
Résumé
A fundamental assumption in economics is that rational individuals act in their own
self interest. One implication is that, when trading, buyers are supposed to seek for the
lowest price and sellers for the highest one and social interactions are not considered.
It is now largely accepted that social relationships affect the efficiency of a market
structure (centralized or decentralized) .
The objectives of the current study is to examine the network structures of a very
specific market : the Boulogne-sur-mer fish market. On this market two market design (auctions and bilateral exchanges) coexist, each beeing used by the same buyers and sellers, exchanging similar
goods. For each sub-market we examine (1) the global network
structure, (2) the local network structure, and (3) we identify the traders characteristics
that best explain the network structures. The objective is to identify the
the influence of trust nad the influence of reputation in the individual choices
of trading partners.
Structural measures are used to characterize networks structures. Exponential random graph models are used to evaluate how trader characteristics explain purchasing
patterns, and how the influence of these characteristics vary with the market mechanism.
We bring into the light that, when the transaction links on the auction market reflects the economic constraints of the partners, the relationships on the bilateral market
depends on something more. Clearly, the prices of the bilateral transactions are the consequences of economics and non economics determinants. At first glance, the stable
co-existence of two market structures looks like a paradox. Our results help to understand the distinctive characteristics and functioning of each sub-market. This discussion
contributes to the debate about the efficiency of market structures.
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