Trust Somebody but Choose Carefully: an Empirical Analysis of Social Relationships on an Exchange Market

EasyChair Preprint 4701

Abstract

This article analyses the influence of trust on the functioning of a market for perishable goods, where there exists no quality signal and quantities can be scarce. On this market, agents can choose between bidding or exchanging through bilateral transactions. Starting from the empirical analysis of a market with a peculiar organization we propose a measurement of trust, based on the dynamics of agents’ encounters. We then analyze the differences in the social network structures and estimate how they affects the market outcomes.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.

Keyphrases: Trust, market structure, social networks

@booklet{EasyChair:4701,
  author    = {Sylvain Mignot and Annick Vignes},
  title     = {Trust Somebody but Choose Carefully: an Empirical Analysis of Social Relationships on an Exchange Market},
  howpublished = {EasyChair Preprint 4701},
  year      = {EasyChair, 2020}}