  Most products are produced and sold by supply chain networks, where an
interconnected network of producers and intermediaries set prices to maximize
their profits. I show that there exists a unique equilibrium in a price-setting
game on a network. The key distortion reducing both total profits and social
welfare is multiple-marginalization, which is magnified by strategic
interactions. Individual profits are proportional to influentiality, which is a
new measure of network centrality defined by the equilibrium characterization.
The results emphasize the importance of the network structure when considering
policy questions such as mergers or trade tariffs.
