Market formation and market selection

The organization of markets is an important field of inquiry in modern economic theory. This monograph analyzes models which consider the formation and selection of markets. In these models, markets are organized by middlemen and used by traders. In Part I of the monograph, coalitions of middlemen are determined endogenously. Arrow/Debreu type consumers choose roles (middleman or trader) and markets in a non-cooperative market formation game. Distributions of consumers over roles and markets that are individually as well as coalitionally stable are investigated. In Part II, the competition in commission fees between exogenously given middlemen, who intermediate on a bilateral matching market is analyzed.