Lecture on the first SFB/TR 15 meeting, Gummersbach, July, 18 - 20, 2004: We develop a general theoretical framework of trade on a platform on which buyers and sellers interact. The platform may be owned by a single large, or many small independent or vertically integrated intermediaries. We...

Increased competition tends to benefit all buyers with increasing product variety and decreasing prices. However, if local and external market channels compete for the same class of products, increased competition from the external market crowds out local variety. Under local monopoly, local...

We develop a model of search among substitutes for the best combination of commodity variant and price, in which the structure of search costs can be manipulated by the suppliers of these variants, e.g. by joining an existing market or opening a new one. We analyse the subgame perfect equilibria...

We analyze the impact of increased outside opportunities brought to consumers by improved access to a global market on local mar- ket performance under monopoly vs. oligopoly. If consumers choose once where to buy, we show that under all forms of organizing the local market, increased...