Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/145367 
Year of Publication: 
2016
Series/Report no.: 
Tinbergen Institute Discussion Paper No. 16-060/VII
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
This paper develops a model in which market structure is determined endogenously by the choice of intermediation mode. We consider two representative business modes of intermediation that are widely used in real-life markets: one is a middleman mode by which an intermediary holds inventories which he stocks from sellers for the purpose of reselling to buyers; the other is a market-making mode by which an intermediary offers a platform for buyers and sellers to trade with each other. In our model, buyers and sellers can simultaneously search in an outside market and use the intermediation service. We show that a marketmaking middleman, who adopts the mixture of these two intermediation modes, can emerge in a directed search equilibrium.
Subjects: 
Middlemen
Marketmakers
Platform
Directed Search
JEL: 
D4
G2
L1
L8
R1
Document Type: 
Working Paper

Files in This Item:
File
Size
775.94 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.