Stability in Trading Networks

Explore a 42-minute lecture on stability in trading networks presented by Zsuzsanna Jankó from Corvinus University of Budapest at the Simons Institute. Delve into a model of matching in trading networks where firms can engage in bilateral contracts. Learn about the concept of trail-stability, which ensures immunity to consecutive, pairwise deviations between linked firms. Discover how trail-stable outcomes exist in any trading network with bilateral contracts when firms' choice functions meet the full substitutability condition. Examine the complexity of finding stable outcomes in trading networks, understanding why it's an NP-hard problem. Gain insights into the challenges of verifying the stability of a given outcome in these networks.