Middlemen in Search Equilibrium: A Survey

Xun (Grace) Gong, Ziqi Qiao and Randall Wright

No 34477, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This essay surveys the literature on middlemen—i.e., intermediation in exchange—reviewing, extending and consolidating key developments in the field. This is important because intermediated trade is common in reality but absent in standard general equilibrium theory. We focus on research using search theory. In various models, agents may act as middlemen when they are good at search, bargaining, recognizing quality, storing inventories, using credit, etc. The theory applies to markets for goods, inputs or assets. We discuss versions with indivisible or divisible goods, fixed or endogenous participation, stationary and dynamic equilibria, and some implications for efficiency and volatility.

JEL-codes: D0 (search for similar items in EconPapers)
Date: 2025-11
New Economics Papers: this item is included in nep-dge, nep-inv, nep-mac and nep-mic
Note: EFG
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