Marketmaking Middlemen
Pieter Gautier,
Bo Hu and
Makoto Watanabe
No 6030, CESifo Working Paper Series from CESifo
Abstract:
This paper develops a model in which market structure is determined endogenously by the choice of intermediation mode. We consider two representative business modes of intermediation that are widely used in real-life markets: one is a middleman mode by which an intermediary holds inventories which he stocks from sellers for the purpose of reselling to buyers; the other is a market-making mode by which an intermediary offers a platform for buyers and sellers to trade with each other. In our model, buyers and sellers can simultaneously search in an outside market and use the intermediation service. We show that a marketmaking middleman, who adopts the mixture of these two intermediation modes, can emerge in a directed search equilibrium.
Keywords: middlemen; marketmakers; platform; directed search (search for similar items in EconPapers)
JEL-codes: D40 G20 L10 L80 R10 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp6030.pdf (application/pdf)
Related works:
Journal Article: Marketmaking Middlemen (2023) 
Working Paper: Marketmaking Middlemen (2016) 
Working Paper: Marketmaking Middlemen (2016) 
Working Paper: Marketmaking Middlemen (2016) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_6030
Access Statistics for this paper
More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().