Stability in Supply Chain Networks
Michael Ostrovsky
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| Article Citation |
Ostrovsky, Michael. 2008. "Stability in Supply Chain Networks." American Economic Review, 98(3): 897–923.
DOI:10.1257/aer.98.3.897
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| Abstract |
This paper studies matching in vertical networks, generalizing the theory of
matching in two-sided markets. It gives sufficient conditions for the
existence of stable networks and presents an algorithm for finding two of
them. One is the best stable network for the agents on the "upstream" end
of an industry. The other is best for the agents on the "downstream" end.
The paper describes several properties of the set of stable networks and
discusses applications of the theory to the design of matching markets
with more than two types of agents and to the empirical analysis of supply
chains.
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| Article Full-Text Access |
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| Authors |
Ostrovsky, Michael (Stanford U)
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| JEL Classifications |
D85: Network Formation and Analysis: Theory
L14: Transactional Relationships; Contracts and Reputation; Networks
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