Intermediation in Networks

Jan-Peter Siedlarek

No 1518, Working Papers (Old Series) from Federal Reserve Bank of Cleveland

Abstract: I study intermediation in networked markets using a stochastic model of multilateral bargaining in which players compete on different routes through the network. I characterize stationary equilibrium payoffs as the fixed point of a set of intuitive value function equations and study efficiency and the impact of network structure on payoffs. There is never too little trade but there may be an inefficiency through too much trade in states where delay would be efficient. With homogeneous trade surplus the payoffs for players that are not essential to a trade opportunity go to zero as trade frictions vanish.

Keywords: bargaining; financial networks; intermediation; matching; middlemen; networks; over-the-counter markets; stochastic games (search for similar items in EconPapers)
JEL-codes: C73 C78 L14 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2015-10-09
New Economics Papers: this item is included in nep-ban, nep-gth and nep-net
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Intermediation in Networks (2014)
Working Paper: Intermediation in Networks (2012)
Working Paper: Intermediation in Networks (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedcwp:1518

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DOI: 10.26509/frbc-wp-201518

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