Intermediation and Competition in Search Markets: An Empirical Case Study

Tobias Salz

No 27700, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Intermediaries in decentralized markets can affect buyer welfare both directly, by reducing expenses for buyers with high search cost and indirectly, through a search-externality that affects the prices paid by buyers that do not use intermediaries. I investigate the magnitude of these effects in New York City’s trade-waste market, where buyers can either search by themselves or through a waste broker. Combining elements from the empirical search and procurement-auction literatures, I construct and estimate a model for a decentralized market. Results from the model show that intermediaries improve welfare and benefit buyers in both the broker and the search markets.

JEL-codes: D43 D44 L0 L13 L81 L97 (search for similar items in EconPapers)
Date: 2020-08
New Economics Papers: this item is included in nep-com and nep-reg
Note: IO
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Citations: View citations in EconPapers (3)

Published as Tobias Salz, 2022. "Intermediation and Competition in Search Markets: An Empirical Case Study," Journal of Political Economy, vol 130(2), pages 310-345.

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