(Friday, 4th April 2003)
The purpose of this talk is to show how networks of trading relationships may grow and be reinforced within a given market structure even when participants have easy access to each other. These networks may be of buyers and sellers or may involve people who have similar opinions as to the evolution of prices.
This idea will be developed with the aid of empirical data from some specific markets and will also examine what happens in financial markets. The nature and robustness of these network structures will also be discussed.
The emphasis throughout will be on models in which agents use simple rules and the evolution of the network structure is due to reinforcement of behaviour as a function of their past experience from their interaction with other agents.
Bibliographical references :
Alain Kirman, "The Structure of Economic Interaction: Individual and Collective Rationality" Working paper, U. of Aix-Marseille III, EHESS, EUI