As a medium forcommunication and coalition, social network plays an important role in economicactivities. Empirical researches indicate that most of social networks performsignificant small-world characteristics, so this paper assumes the socialnetwork among merchants is a small-world network, and then studies the agencyactivities of merchants by means of simulation based on a game model. We findthat if the average degree of the network increases, the wage of agents willdecrease and social efficiency will increase, but the probability of emergenceof third-part institutions such as courts, which is the basis of modern marketeconomy, will decrease.