This paper proposes a model for analyzing an intermediary's incentives to increase the search costs incurred by consumers looking for sellers stores. First, we show that the quality of the search service offered to consumers is more likely to be degraded (i.e. the probability that consumers find their favorite store...
This paper provides a first pass at clarifying the economic tradeoffs between two polar strategies for market intermediation: the "Merchant" mode, in which the intermediary buys from sellers and resells to buyers; and the "Two-sided platform" mode, under which the intermediary enables affiliated sellers to sell directly to affiliated buyers....
The Internet has introduced a variety of online buying services that expand the reach of sellers and reduce search costs for buyers. In markets in which traditional outlets establish prices through bargaining, these online intermediaries have also altered the price setting process. Perhaps the most well known example is Autobytel.com...
The role of financial intermediaries (advisers, distributors, or broker-dealers) is crucial and, in most cases, a vital link in the road to investment avenues. This article traces key developments in the funds sector, evaluates the scope of investor servicing activities associated with financial intermediaries, and examines some of the key...
It seems surprising that small firms engage in offshore outsourcing given that they lack the resources that large firms possess to overcome the difficulties involved. This paper examines these factors using transaction cost theory's three stages: contact costs, contract costs, and control costs. Then, using field data from small client...
Many suppliers struggle to win the participation and involvement of their intermediaries. Intermediaries buy from suppliers they trust, and from suppliers with whom they have shared goals. After product quality and functionality, the key driver for choosing a vendor is trust and its perceived reliability. Price and margin come sixth,...
The volume of activities that regulated market intermediaries ("outsourcing firms" or "firms") outsource to third party service providers ("service providers") continues to increase. This paper discusses how the service provider may be a related party within a corporate group, or an unrelated outside entity. The service provider may itself either...
This paper addresses the proper measurement of financial service output that is not priced explicitly. It shows how to impute nominal service output from financial intermediaries' interest income and how to construct price indices for those financial services. The present an optimizing model with financial intermediaries, that provide financial services...
This paper provides evidence that transactions accounts help financial intermediaries monitor borrowers by offering lenders a continuous stream of data on borrower's account balances. This information is most readily available to commercial banks, but other intermediaries, such as finance companies, also have access to such information at a cost. It...
Never before in the history of reinsurance has the role of the reinsurance intermediary been tested as it has over the last several years. The assistance of intermediaries is invaluable in this environment. Insurers are seeking coverage for the risks they face. The challenge to intermediaries is to analyze these...
Industrial buyers who seek to procure inputs have the option of contracting the process out to procurement intermediaries. Many of these intermediaries now operate using Internet-based software to enhance the efficiency of their services. A theoretical model of a buyer is developed who wishes to procure an input from one...
This paper analyzes dynamic equilibrium risk sharing contracts between profit-maximizing intermediaries and a large pool of ex-ante identical agents that face idiosyncratic income uncertainty that makes them heterogeneous ex-post. The paper considers the extreme scenario that the agents face no costs to walking away, and can sign up with any...
This article simplifies certain terminology referring to a transaction with more than one securities intermediary. First, the term "investors" generally deemed to include not only investors but also intermediaries that have rights in securities held by other intermediaries. It also refers to holder of an interest in securities through an...
Economic distortions can arise when financial claims trade at prices set by an intermediary rather than direct negotiation between principals. We demonstrate the problem in a specific context, the exchange of open-end mutual fund shares. Mutual funds typically set fund share price NAV using an algorithm that fails to account...
The Internal Revenue Service recently issued Revenue Ruling 2002-83 dealing with like-kind exchanges between related parties and unrelated qualified intermediaries. The service held that a taxpayer who transfers relinquished property to a qualified intermediary in exchange for replacement property formerly owned by a related party is not entitled to non...
A distribution channel consists of individuals, systems, and tools responsible for taking the product from the production stage to the consumption stage. A large number of intermediaries function at different points in a distribution channel. Operationalization of the channel involves transaction between the aforesaid intermediaries. The paper examines the dynamics...
The savings/investment process in capitalist economies is organized around financial intermediation, making them a central institution of economic growth. Financial intermediaries are firms that borrow from consumer/savers and lend to companies that need resources for investment. In contrast, in capital markets investors contract directly with firms, creating marketable securities. The...
Motivated by evidence on the importance of incomplete information and networks in international trade, this paper investigates the supply of network intermediation. It hypothesizes that the agents who become international trade intermediaries first accumulate networks of foreign contacts while working as employees in production or sales, then become entrepreneurs who...
The Securities and Exchange Commission has adopted amendments to its proxy rules designed allow companies to satisfy the SEC’s requirements for delivery of proxy statements to security holders who share the same address by providing a single proxy statement to those security holders. This delivery method is commonly referred to...
EXCLUSIVE Vatican shuns defectors and backs calls for Anglican unity Vatican calls for Anglicans to unite The Pope is leading an unprecedented drive by the Roman Catholic Church to prevent the fragmentation of the worldwide Anglican Communion ahead ofthe once-a-decade gathering of its...
