Entry-deterring agency

• 成果类型: Article
• 署名作者: Loertscher, Simon; Niedermayer, Andras
• 署名单位: University of Melbourne; CY Cergy Paris Universite
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2019.09.012
• 发表日期: 2020
• 页码: 172-188
• 关键词: Entry deterrence; Brokerage; Endogenous market structure; platforms; Competing exchanges

摘要

We provide a model in which an intermediary can choose between wholesale or agency. The possibility that buyers and sellers transact directly limits his market power and, thus, creates incentives for him to deter the emergence of bilateral exchanges. In equilibrium, the intermediary chooses agency and thereby pre-empts the emergence of a competing bilateral exchange if the matching technology of the competing exchange is sufficiently efficient. For symmetric Pareto distributions, whenever agency is chosen in equilibrium, consumer and social surplus decrease while listing and transaction prices tend to increase. The predictions of our model are broadly consistent with empirical evidence. (C) 2019 Elsevier Inc. All rights reserved.