Information Externalities and Intermediaries in Frictional Search Markets Information Externalities and Intermediaries in Frictional Search Markets *
نویسندگان
چکیده
In frictional matching markets with heterogeneous buyers and sellers, sellers incur discrete showing costs to show goods to buyers who incur discrete inspection costs to assess the suitability of the goods on offer. This paper studies how brokers can help reduce these costs by managing the level and mix of goods in their inventory. We find that intermediaries emerge and improve social welfare when there is sufficient heterogeneity in the types of goods and preferences. Our analysis highlights how learning and inventory management enable search intermediaries to internalize information externalities generated in unintermediated private search. ∗We thank Ettore Damiano, Jean Guillaume Forand, Robert McMillan, Carolyn Pitchik, Shouyong Shi, Matt Turner, Asher Wolinsky, Andriy Zapechelnyuk, and seminar participants at Peking University, Queen’s University, University of Toronto, and Econometric Society World Congress at Shanghai for helpful comments and suggestions. We are grateful to three anonymous referees for many constructive comments. We also thank Lucas Siow for research assistance. The first author is grateful to the Alexander von Humboldt Foundation for financial support and to the Chair of Economic Theory II at University of Bonn for its hospitality where part of this work was completed. Both authors also thank SSHRC for financial support. This paper was previously circulated under the title of “Search Intermediaries”. †Department of Economics, University of Toronto, 150 St. George Street, Toronto, ON M5S3G7, Canada. Email: [email protected], [email protected].
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تاریخ انتشار 2013