Theoretical and Applied Economics
No. 2 / 2019 (619), Summer
Posted offers in exogenous networks: A theoretical application and experimental results
University of Wisconsin, River Falls, USA
Andrea SORENSEN
Southern Illinois University, Carbondale, USA
Abstract. The Federal Communications Commission (FCC) allocates bands of radio frequency on the electromagnetic spectrum to agents called primary users (PUs), typically through standard auctions. We devise ways for unused channels to be sold in a secondary market to secondary users (SUs) who do not have licensing rights to access the spectrum. We propose a model in which PUs can set prices and offer unused channels to SUs, where trading takes place in small exogenous networks. Equilibrium prices depend on both the structure of the network and buyer valuation, and interestingly, “good” buyer location on the network is not always favorable. In equilibrium, buyers with many connections on the network can face high prices despite seller competition and can even face two prices in equilibrium. We test this model in an experiment, varying network structure and price possibilities across a total of four experimental sessions. Our results provide evidence that buyers in good locations often face high prices despite seller competition and that buyers in bad locations also face high prices but have the benefit of being served first in the market.
Contents
The education and training. Priorities of the European Union
Posted offers in exogenous networks: A theoretical application and experimental results
The role of Japan in the development of emerging markets in Asia. Key lessons learned for China
Empirical examination of the stability of expectations – Augmented Phillips Curve for developing and developed countries
The causality between economic growth and stock market in developing and developed countries: Toda-Yamamoto approach
Government failure vs. Market failure. The implications of incomplete information
Foreign direct investment and total factor productivity in South Asia
The effects of political and financial risks on foreign direct investments to the MENAT countries
Exploring the nexus between macroeconomic variables and stock market returns in Germany: An ARDL Co-integration approach
Income inequalities and economic convergence in CEE countries
Exchange rate regimes and its impact on growth: An empirical analysis of BRICS countries
Dynamics of business cycle and long-term economic growth of Pakistan
Per capita gross domestic product and welfare of Gabonese households: A VAR model with exogenous hypothesis
Co-integration with regime shift between government expenditure and poverty reduction in Algeria
Trade in a two sector endogenous growth model with two accumulating factors
What discriminates the welfare outcomes of children in India. A multiple discriminant analysis in selected states