Middlemen in the Shapley-Shubik Competitive Markets for Indivisible Goods

Oishi Takayuki and Sakaue Shin ()
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Oishi Takayuki: Faculty of Economics, Aomori Public University
Sakaue Shin: Graduate School of Global Environmental Studies, Sophia University

Mathematical Economics Letters, 2014, vol. 2, issue 1-2, 19-26

Abstract: We generalize the Shapley-Shubik market model for indivisible goods by considering the case where agents need middlemen to exchange their indivisible goods. In this model, there always exist competitive equilibria in which transaction takes place directly between sellers and buyers or indirectly through the middlemen. Furthermore, the incentives of middlemen to enter the market exist. We derive these results from the existence of an integral solution for a partitioning linear program.

Keywords: Middlemen; competitive equilibrium; partitioning linear program; Middlemen; competitive equilibrium; partitioning linear program (search for similar items in EconPapers)
JEL-codes: C62 D50 (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1515/mel-2013-0024

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