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Middlemen and the Allocation of Heterogeneous Goods

Author

Listed:
  • Alok Johri

    (McMaster University, Canada)

  • John Leach

    (McMaster University, Canada)

Abstract

This article presents a general equilibrium model in which middlemen emerge to facilitate trade in an environment of idiosyncratic tastes and heterogeneous goods. The gains to the traders can be measured along three dimensions: the rate of production, the time-preference losses generated by the matching process, and the quality of the match between consumers' preferences and the goods they ultimately consume. Copyright Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association

Suggested Citation

  • Alok Johri & John Leach, 2002. "Middlemen and the Allocation of Heterogeneous Goods," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(2), pages 347-362, May.
    • Handle: RePEc:ier:iecrev:v:43:y:2002:i:2:p:347-362
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    References listed on IDEAS

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    1. Yavas, Abdullah, 1992. "Marketmakers versus matchmakers," Journal of Financial Intermediation, Elsevier, vol. 2(1), pages 33-58, March.
    2. Biglaiser, Gary & Friedman, James W., 1994. "Middlemen as guarantors of quality," International Journal of Industrial Organization, Elsevier, vol. 12(4), pages 509-531, December.
    3. Abdullah Yavaş, 1996. "Search and Trading in Intermediated Markets," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 5(2), pages 195-216, June.
    4. Kiyotaki, Nobuhiro & Wright, Randall, 1993. "A Search-Theoretic Approach to Monetary Economics," American Economic Review, American Economic Association, vol. 83(1), pages 63-77, March.
    5. Gary Biglaiser, 1993. "Middlemen as Experts," RAND Journal of Economics, The RAND Corporation, vol. 24(2), pages 212-223, Summer.
    6. Li, Yiting, 1998. "Middlemen and private information," Journal of Monetary Economics, Elsevier, vol. 42(1), pages 131-159, June.
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