EconPapers    
Economics at your fingertips  
 

Marketmaking Middlemen

Pieter Gautier, Bo Hu () and Makoto Watanabe
Additional contact information
Bo Hu: Vrije Universiteit Amsterdam

No 10152, IZA Discussion Papers from Institute of Labor Economics (IZA)

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 where an intermediary holds inventories which he stocks from sellers for the purpose of reselling to buyers; the other is a market-making mode where 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: platform; marketmakers; middlemen; directed search (search for similar items in EconPapers)
JEL-codes: D4 G2 L1 L8 R1 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2016-08
New Economics Papers: this item is included in nep-dge
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published - published in: RAND Journal of Economics, 2023, 54 (1), 83 - 103

Downloads: (external link)
https://docs.iza.org/dp10152.pdf (application/pdf)

Related works:
Journal Article: Marketmaking Middlemen (2023) Downloads
Working Paper: Marketmaking Middlemen (2016) Downloads
Working Paper: Marketmaking Middlemen (2016) Downloads
Working Paper: Marketmaking Middlemen (2016) Downloads
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:iza:izadps:dp10152

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().

 
Page updated 2025-03-30
Handle: RePEc:iza:izadps:dp10152