The Market for Access to Trading Partners, Brokers, and Price Determination

Michael Sattinger

Discussion Papers from University at Albany, SUNY, Department of Economics

Abstract: This paper furthers a research program in which the price at any point in time is determined by the market for access to trading partners. In this paper, the market is implemented by competitive brokers in a matching model of trade. If a certain condition holds, brokers can make profits by entering the market and offering a different ratio of buyers to sellers. Brokers are shown to set fees that eliminate congestion externalities. The fees constitute the price adjustment, generating dynamic price paths.

Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:nya:albaec:99-07

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