Trading Information Goods on a Network: An Experiment

ISER DP No. 1151

76 Pages Posted: 6 Dec 2021

See all articles by Nobuyuki Hanaki

Nobuyuki Hanaki

Osaka University - Institute of Social and Economic Research

Yutaka Kayaba

Graduate School of Economics, U. of Tokyo

Jun Maekawa

Osaka University of Economics and Law

Hitoshi Matsushima

University of Tokyo - Faculty of Economics

Date Written: December 1, 2021

Abstract

We experimentally examine the impact of a cycle path on the trading of a copyable information good in networks. A cycle path in a network permits a buyer to become a reseller that can compete against existing sellers by replicating the good. Theory predicts 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.

Keywords: Information Good, Network

JEL Classification: D42, L14

Suggested Citation

Hanaki, Nobuyuki and Kayaba, Yutaka and Maekawa, Jun and Matsushima, Hitoshi, Trading Information Goods on a Network: An Experiment (December 1, 2021). ISER DP No. 1151, Available at SSRN: https://ssrn.com/abstract=3975962 or http://dx.doi.org/10.2139/ssrn.3975962

Nobuyuki Hanaki (Contact Author)

Osaka University - Institute of Social and Economic Research ( email )

6-1, Mihogaoka
Ibaraki, Osaka 567-0047
Japan

Yutaka Kayaba

Graduate School of Economics, U. of Tokyo ( email )

7-3-1 Hongo
Bunkyo-ku
Tokyo, 113-0033
Japan

Jun Maekawa

Osaka University of Economics and Law ( email )

Japan

Hitoshi Matsushima

University of Tokyo - Faculty of Economics ( email )

7-3-1 Hongo, Bunkyo-ku
Tokyo 113-0033
Japan

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