Intermediation.
This paper presents a parametric model that explains why individuals choose to trade with an intermediary. This choice is based on a comparison of the gain from trading with the intermediary with the expected gain from entering a matching process where individuals can choose to be direct buyers, direct sellers, or nonparticipants. The intermediary provides a service by making the product more liquid by lowering the probability of an unsuccessful trade. However, the individuals who choose to remain direct traders are made worse-off by the existence of the intermediary. Copyright 1996 by The London School of Economics and Political Science.
Year of publication: |
1996
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Authors: | Cosimano, Thomas F |
Published in: |
Economica. - London School of Economics (LSE). - Vol. 63.1996, 249, p. 131-43
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Publisher: |
London School of Economics (LSE) |
Saved in:
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