By buying, holding and selling offset credits from storage, the intermediary can decrease both financial and ecological risks in the market. Specialised intermediaries facilitate trading by providing information and brokering services. These markets are characterised by high information requirements and transaction costs, threatening economic efficiency and even biodiversity outcomes. This paper provides a behavioural and welfare analysis of an intermediary in biodiversity offset markets. Finally, we establish the coincidence between the core and the set of competitive equilibrium payoff vectors. However, we prove that in these small markets the maximum core payoff to each middleman is her marginal contribution. In general, the core does not exhibit a middleman-optimal allocation, not even when there are only two buyers and two sellers. Second, we prove that matching markets with middlemen are totally balanced: in particular, we show the existence of a buyer-optimal (seller-optimal) core allocation where each buyer (seller) receives her marginal contribution to the grand coalition. We first show that, in our context, an optimal matching can be obtained by considering the two-sided assignment market where each buyer–seller pair is allowed to use the mediation services of any middleman free of charge. For each such market, we examine the associated TU game. In our framework, a buyer–seller pair may either trade directly or use the services of a middleman and a middleman may serve multiple buyer–seller pairs. This paper studies matching markets in the presence of middlemen. The comparison between the two mechanisms gives a stylized intuition for the hierarchical structure of larger markets and institutions. Finally, I show that in large markets the dynamic mechanism and Vickrey-like auction have the same expected total surplus. Nevertheless, under mild conditions the agents are ex ante better off under the dynamic mechanism relative to a Vickrey-like auction because the intermediaries are more able to exploit information asymmetries in the dynamic mechanism than agents are able to exploit information asymmetries in the Vickrey-like auction. The dynamic mechanism is inefficient with positive probability. This mechanism has a unique (up to permutation) weak perfect Bayesian equilibrium. I construct a novel dynamic mechanism implemented by a principal who faces a set of intermediaries, each of whom represents an ex ante identical set of agents. It does not store any personal data.Why do some incomplete information markets feature intermediaries while others do not? I study the allocation of two goods in an incomplete information setting with a single principal, multiple agents with unit demand, and interdependent valuations. The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. The cookie is used to store the user consent for the cookies in the category "Performance". This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other. The cookies is used to store the user consent for the cookies in the category "Necessary". The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". The cookie is used to store the user consent for the cookies in the category "Analytics". These cookies ensure basic functionalities and security features of the website, anonymously. Necessary cookies are absolutely essential for the website to function properly. Thus we say that middlemen today play a vital role in the transfer of goods from the producers to the consumers and moreover an important link between producers and ultimate consumers. In this situation, it is not possible for producers to have direct contact with the consumers. With the rapid development in the field of business activities, the business of today is not confined to a village or a city or a state. Some people say “Middlemen and Agents are nothing but social parasites and the sooner they are eliminated the better for the society.” In our own opinion to say like that is not just, because in the age of ‘division of labour’ and ‘specialisation’, the existence of middlemen is a must. Merchant does buying and reselling but agent may specialize in negotiations of either selling or buying transactions. If he does, then he is a merchant otherwise he is an agent. Hence the difference between the two lies in the ‘title of goods’ he handles.
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