Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/103891
Authors: 
Siedlarek, Jan-Peter
Year of Publication: 
2014
Series/Report no.: 
SFB/TR 15 Discussion Paper 471
Abstract: 
I study intermediation in networked markets using a stochastic model of multilateral bargaining in which traders compete on different routes through the network. I characterize stationary equilibrium payoffs as the fixed point of a set of intuitive value function equations and study efficiency and the impact of network structure on payoffs. There is never too little trade but there may be an inefficiency through too much trade in states where delay would be efficient. With homogenous trade surplus the payoffs for players that are not essential to a trade opportunity go to zero as trade frictions vanish.
Subjects: 
bargaining
financial networks
intermediation
matching
middlemen
networks
over-the-counter markets
stochastic games
JEL: 
C73
C78
L14
Document Type: 
Working Paper

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