Retail networks in underdeveloped regions are crucial for creating jobs and generating tax revenue. The researchers suggest that these networks exist because firms make rational decisions in uncertain environments. They found that firms that predict demand are more successful, and trading with retailers is better than selling directly to consumers. Retail networks increase welfare by supplying more goods than direct producer-consumer trade. The size of these networks depends on how much demand fluctuates, and advances in data processing can shrink them. This can lead to fewer jobs and less tax revenue in underdeveloped regions.