Middlemen In Search Equilibrium
This article shows how allowing for goods to be divisible at the point of consumption and incorporating productive heterogeneity lead to the emergence of middlemen in an equilibrium search environment. In the baseline model, middlemen are welfare reducing and their number increases as market frictions are reduced. When the model is extended to allow for time taken in production and increasing returns to scale in the market meeting technology, middlemen can be beneficial to society by speeding up the meeting process. Copyright 2007 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.
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Volume (Year): 48 (2007)
Issue (Month): 1 (02)
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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Diamond, Peter A, 1982.
"Aggregate Demand Management in Search Equilibrium,"
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University of Chicago Press, vol. 90(5), pages 881-894, October.
- Alok Johri & Lohn Leach, 2000.
"Middlemen and the Allocation of Heterogeneous Goods,"
Department of Economics Working Papers
2000-06, McMaster University.
- Alok Johri & John Leach, 2002. "Middlemen and the Allocation of Heterogeneous Goods," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(2), pages 347-362, May.
- Mortensen, Dale T., 1987.
"Job search and labor market analysis,"
Handbook of Labor Economics,
in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 2, chapter 15, pages 849-919
- Martin J. Osborne & Ariel Rubinstein, 2005. "Bargaining and Markets," Levine's Bibliography 666156000000000515, UCLA Department of Economics.
- Arthur J. Hosios, 1990. "On The Efficiency of Matching and Related Models of Search and Unemployment," Review of Economic Studies, Oxford University Press, vol. 57(2), pages 279-298.
- Kiyotaki, Nobuhiro & Wright, Randall, 1989. "On Money as a Medium of Exchange," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 927-954, August.
- Eric Smith, 2004. "Intermediated Search," Economica, London School of Economics and Political Science, vol. 71(284), pages 619-636, November.
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