Cooperation in partly observable networked markets

We present a model of repeated games in large two-sided networks between clients and agents in the presence of third-party observability networks via which clients share information about past transactions. The model allows us to characterize cooperation networks-networks in which each agent cooperates with every client that is connected to her. To this end, we show that: [1] an agent a's incentives to cooperate depend only on her beliefs with respect to her local neighborhood-a subnetwork that includes agent a and is of a size that is independent of the size of the entire network; and [2] when an agent a observes the network structure only partially, her incentives to cooperate can be calculated as if the network were a random tree with agent a at its root.