On the Emergence and Evolution of Mark-up Middlemen: An Inframarginal Model

Chun Pang and He-ling Shi ()

No 24-10, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: This paper is aimed to provide an economic interpretation on the emergence and evolution of the specialised middlemen whose duty is to facilitate the transactions of goods and services in an economy. In a general equilibrium framework, the emergence and evolution of the specialised middlemen conforms to Adam Smith’s insight of deepening specialisation and the division of labour with the improvement in institutions and/or transaction technologies. Consequently, the emergence and the growth of the intermediation sector in both absolute and relative terms, the expansion of the network which provides transaction services, the evolution of market structure from autarky towards division of labour, the improvement in productivity, the reduction in wholesaling-retailing price dispersion, will be realised in concurrency

Keywords: middlemen; transaction efficiency; inframarginal economics (search for similar items in EconPapers)
JEL-codes: L14 M21 O43 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2010-05
New Economics Papers: this item is included in nep-evo
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