Intermediation as rent extraction

• 成果类型: Article
• 署名作者: Farboodi, Maryam; Jarosch, Gregor; Menzio, Guido; Wiriadinata, Ursula
• 署名单位: Massachusetts Institute of Technology (MIT); National Bureau of Economic Research; Duke University; New York University; International Monetary Fund
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2025.106029
• 发表日期: 2025
• 关键词: Intermediation; search frictions; Rent extraction

摘要

This paper shows that intermediation in asset markets may emerge exclusively because of rent extraction motives. Among dealers with heterogeneous bargaining skills, those with superior skills become intermediaries and constitute the core of the trading network, while those with inferior skills constitute the periphery. Intermediation is privately profitable because agents with superior bargaining skills can take positions and unwind them in the future at a better price than others could. Intermediation arises endogenously despite being socially worthless and the resources invested in bargaining skills are wasted. Using a dataset on the Indonesian interbank market, we document that prices vary with the centrality of buyers and sellers in a way that is uniquely consistent with our theory.