This paper examines how the introduction of a direct trade alternative for buyers and sellers affects competition among middlemen. Direct trade makes middlemen’s supply and demand functions depend on both bid and ask prices, a feature we term interdependence. A simple model is used to...

This paper develops a theoretical model of how bookmakers’ odds are determined, given varying levels of inside information on the part of punters. Bookmakers’ attitudes towards risk and the degree of competition between them will influence bookmaker behaviour. Using a data set of 1696 races...

This Paper analyses strategic bargaining between two agents each of whom negotiates on behalf of a principal. The principals face uncertainty about the bargaining skills of their agents as measured by the agents' abilities to assess the opponent's preferences. Agents then have an incentive to...

This paper analyses competition between direct and intermediated trade. We show that middlemen’s supply and demand depend on both their bid and ask prices if sellers and buyers have the alternative of trading directly. Multiplicity also prevails. Direct trade does not constrain the market...