The paper addresses the following question: How efficient is the market system in allocating resources if trade takes place at some prices p that are not necessarily competitive? Even though there are many partial answers to this question, an answer that stands comparison to the rigor by which...

We rationalize exclusive portfolio dealing in a novel three-period partial equilibrium framework populated by a representative, risk-neutral seller and a small number of ex ante identical broker-dealers. Endowed with independent, uncertain demand for a representative asset, the broker-dealers...