Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/200543
Authors: 
Nosal, Ed
Wong, Yuet-Yee
Wright, Randall D.
Year of Publication: 
2019
Series/Report no.: 
Working Paper No. 2019-5
Abstract: 
We analyze agents' decisions to act as producers or intermediaries using equilibrium search theory. Extending previous analyses in various ways, we ask when intermediation emerges and study its efficiency. In one version of the framework, meant to resemble retail, middlemen hold goods, which entails (storage) costs; that model always displays uniqueness and simple transition dynamics. In another version, middlemen hold assets, which entails negative costs, that is, positive returns; that model can have multiple equilibria and complicated belief-based dynamics. These results are consistent with the venerable view that intermediation in financial markets is more prone to instability than in goods markets.
Subjects: 
middlemen
intermediation
search
bargaining
multiplicity
JEL: 
G24
D83
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size
616.28 kB





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