IDEAS home Printed from https://ideas.repec.org/p/keo/dpaper/2015-006.html
   My bibliography  Save this paper

Wholesale Transactions under Economies and Diseconomies of Scope in Search Activities in a Model of Search and Match

Author

Listed:
  • Shigeru Makioka

    (Faculty of Economics, Keio University)

Abstract

In a basic model of search and match, thanks to the assumption that producer-sellers and consumer-buyers pay constant search costs per one unit of a single type of goods, it suffices to consider the retail transactions between producer-sellers and consumer-buyers. We extend this model to allow for the possibilities of economies and diseconomies of scopes in search activities over two types goods. We show that producer-sellers make wholesale transactions with one another when the benefit of economies of scope is strong enough. But when the benefit of economies of scope in search activities for buyers compensates the loss of diseconomies of scope in search activities for sellers, there are multiple equilibria: Matched pairs of producer-sellers always make wholesale transactions in one equilibrium. But they never make those in another, so that there only are retail transactions.

Suggested Citation

  • Shigeru Makioka, 2015. "Wholesale Transactions under Economies and Diseconomies of Scope in Search Activities in a Model of Search and Match," Keio-IES Discussion Paper Series 2015-006, Institute for Economics Studies, Keio University.
    • Handle: RePEc:keo:dpaper:2015-006
    as

    Download full text from publisher

    File URL: https://ies.keio.ac.jp/upload/pdf/en/DP2015-006.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. 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.
    2. Carlson, John A. & McAfee, R. Preston, 1984. "Joint search for several goods," Journal of Economic Theory, Elsevier, vol. 32(2), pages 337-345, April.
    3. Burdett, Kenneth & Malueg, David A., 1981. "The theory of search for several goods," Journal of Economic Theory, Elsevier, vol. 24(3), pages 362-376, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Carrasco, Jose A. & Harrison, Rodrigo, 2023. "Costly multi-unit search," European Economic Review, Elsevier, vol. 154(C).
    2. Gatti, J. Rupert J., 1999. "Multi-Commodity Consumer Search," Journal of Economic Theory, Elsevier, vol. 86(2), pages 219-244, June.
    3. Zhou, Jidong, 2011. "Multiproduct search," MPRA Paper 37139, University Library of Munich, Germany.
    4. Raluca M. Ursu & Daria Dzyabura, 2020. "Retailers’ product location problem with consumer search," Quantitative Marketing and Economics (QME), Springer, vol. 18(2), pages 125-154, June.
    5. Pedro Cosme Costa Vieira, 2005. "Multi Product Market Equilibrium with Sequential Search," FEP Working Papers 166, Universidade do Porto, Faculdade de Economia do Porto.
    6. Richards, Timothy J. & Hamilton, Stephen F. & Allender, William, 2016. "Search and price dispersion in online grocery markets," International Journal of Industrial Organization, Elsevier, vol. 47(C), pages 255-281.
    7. Alexei Parakhonyak, 2009. "On The Relevance Of Irrelevant Information," Tinbergen Institute Discussion Papers 09-087/1, Tinbergen Institute.
    8. Shelegia, Sandro, 2012. "Multiproduct pricing in oligopoly," International Journal of Industrial Organization, Elsevier, vol. 30(2), pages 231-242.
    9. Hendrik P. van Dalen & Aico P. van Vuuren, 2003. "Greasing the Wheels of Trade," Tinbergen Institute Discussion Papers 03-066/1, Tinbergen Institute.
    10. Ata Atay & Eric Bahel & Tamás Solymosi, 2023. "Matching markets with middlemen under transferable utility," Annals of Operations Research, Springer, vol. 322(2), pages 539-563, March.
    11. Alok Johri & Terry Yip, 2017. "Financial Shocks,Supply-chain Relationships and the Great Trade Collapse," Department of Economics Working Papers 2017-11, McMaster University.
    12. Makoto Watanabe, 2018. "Middle Men: The Visible Market-Makers," The Japanese Economic Review, Springer, vol. 69(2), pages 156-170, June.
    13. Arya, Anil & Löffler, Clemens & Mittendorf, Brian & Pfeiffer, Thomas, 2015. "The middleman as a panacea for supply chain coordination problems," European Journal of Operational Research, Elsevier, vol. 240(2), pages 393-400.
    14. J. Rupert Gatti, 2000. "Equilibrium Price Dispersion with Sequential Search," Econometric Society World Congress 2000 Contributed Papers 1368, Econometric Society.
    15. Lars Boerner & Daniel Quint, 2023. "Medieval Matching Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(1), pages 23-56, February.
    16. Xianwen Shi & Aloysius Siow, 2014. "Information externalities and intermediaries in frictional search markets," Canadian Journal of Economics, Canadian Economics Association, vol. 47(4), pages 1131-1152, November.
    17. Leung, Charles Ka Yui & Tse, Chung-Yi, 2017. "Flipping in the housing market," Journal of Economic Dynamics and Control, Elsevier, vol. 76(C), pages 232-263.
    18. Mulyadi, 2017. "Economic Speculative Motives in Selling Relocation Houses and the Provision of Assets for Urban Settlements," GATR Journals gjbssr463, Global Academy of Training and Research (GATR) Enterprise.
    19. Shouyong Shi, 2006. "A Microfoundation of Monetary Economics," Working Papers tecipa-211, University of Toronto, Department of Economics.
    20. Saadia El Obadi & Silvia Miquel, 2019. "Assignment Games with a Central Player," Group Decision and Negotiation, Springer, vol. 28(6), pages 1129-1148, December.

    More about this item

    Keywords

    search and match; economies of scope; wholesale transaction;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:keo:dpaper:2015-006. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Institute for Economics Studies, Keio University (email available below). General contact details of provider: https://edirc.repec.org/data/iekeijp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.