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Title: Trade through endogenous intermediaries
Authors: Kilenthong, W.T. 
Qin, Zhicheng 
Keywords: Endogenous intermediary;Intermediation core;Intermediation game;Price formation;Subgame perfect equilibrium
Issue Date: 2014
Publisher: Scopus
University of the Thai Chamber of Commerce
Source: W.T. Kilenthong, Zhicheng Qin (2014) Trade through endogenous intermediaries. Journal of Mathematical Economics Vol.50 No.1, 262-268.
Abstract: We propose an intermediation core for an economy that explicitly specifies how traders organize themselves into trade cooperatives (intermediaries) and how trade between them gets carried out. The intermediation core allocations are closely related to the equilibrium allocations of a noncooperative intermediation game in Townsend (1983). We show that the intermediation core contains all subgame perfect equilibrium allocations of the intermediation game, similar to the inclusion ofcompetitive equilibrium allocations in the core usually studied. We identify intermediation core allocations that are also subgame perfect equilibrium allocations of the intermediation game in terms of the supporting intermediary structures. These results help to characterize subgame perfect equilibrium allocations of the intermediation game and to analyze their welfare and stabilityproperties.
Rights: This work is protected by copyright. Reproduction or distribution of the work in any format is prohibited without written permission of the copyright owner.
Appears in Collections:RSO: Journal Articles

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