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SUMMARY:Tough Middlemen: A Theory of Intermediation as Pure Rent Extractio
 n
DTSTART:20161014T103000
DTEND:20161014T120000
DTSTAMP:20260916T010348Z
UID:2e10c3374d07b1acff7d6d185bac9c9acda6ee26d7ab50adb35c076f
CATEGORIES:Conferences - Seminars
DESCRIPTION:Gregor JAROSCH (Stanford University)\nWe study a decentralized
  market in which individuals with time-varying taste for an asset trade in
  bilateral meetings. We show that\, when agents differ in terms of their a
 bility to negotiate\, those with a superior bargaining technology become i
 ntermediaries\, in the sense that they carry out trades purely motivated b
 y  re-trading considerations. These non-fundamental trades are redistribu
 tional and leave the quality of the allocation unaltered\, implying that t
 hey are socially inefficient in the presence of transaction costs. The co
 existence of market participants with heterogeneous bargaining technology 
 is a natural equilibrium outcome when ex-ante homogeneous agents can acqu
 ire negotiation skills at a cost. Resources spent on the superior bargaini
 ng technology constitute a reduction in welfare. Moreover\, the incentive
 s for rent-extraction grow as the market becomes less frictional and welfa
 re may fall. We use the framework to study the consequences of a ban in pr
 ice-discrimination\, a minimum holding time requirement\, and transaction 
 fees.
LOCATION:UNIL\, Extranef\, room 126 https://planete.unil.ch/plan/?local=EX
 T-126
STATUS:CONFIRMED
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