Cash Providers: Asset Dissemination over Intermediation Chains

Gabrielle Demange and Jean-Edouard Colliard

No 10747, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Many financial assets are disseminated to final investors via chains of over-the-counter transactions between intermediaries (dealers). We model such an intermediation process as a game with successive take-it-or-leave-it offers: An agent buying some units of an asset can offer to sell part of the volume to another OTC partner, and so on. At the equilibrium of this game, the length of intermediation chains, the terms of trade (prices and units sold) and their pattern along a chain are endogenously determined. Our model thus gives a framework to analyze how intermediation chains impact an asset's market liquidity, its issuance, and who ultimately holds the asset.

Keywords: Dealer markets; Intermediation chains; Liquidity; Otc markets (search for similar items in EconPapers)
JEL-codes: C78 D85 G21 G23 (search for similar items in EconPapers)
Date: 2015-08
New Economics Papers: this item is included in nep-ban
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP10747 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Cash Providers: Asset Dissemination over Intermediation Chains (2014)
Working Paper: Cash Providers: Asset Dissemination over Intermediation Chains (2014)
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:cpr:ceprdp:10747

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP10747

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().