Price Coherence and Adverse Intermiation by njamin G. elman and Julian Wright In modern markets buyers can often buy the same good or service directly from a seller and through one or more intermiaries all at the same exact price. Buyers respond by choosing whichever intermiary offers the greatest nefit perhaps a rebate some kind of points or superior service. Importantly buyers ignore the fees that intermiaries charge to sellers.

The resulting outcomes can

Distortionary and welfare rucing. In particular as intermiaries compete to attract buyers they can set nefit levels so high that no net value is creat and sometimes that buyers and seller would  jointly tter off without intermiaries. The study examines six markets in which intermiaries are Taiwan Telegram Number Data prominent travel booking networks crit and debit cards insurance brokers and financial advisors malls and marketplaces such as Amazon Marketplace cashback and rebate services and search engine advertising. In each instance a law norm intermiary policy or similar rigidity prevents sellers from passing an intermiary s fees to the specific buyers who choose to use that intermiary.

Key concepts include Due to a market

Failure caus by the structure of the relationship tween buyer seller and intermiary when buyers face a single price intermiaries can thrive even when they offer little or no Estonia Phone Number List actual value.charge to buyers intermiaries cause excessive usage of their services usage which then lets intermiaries extract significant fees from sellers inde yond even the normal monopoly fees. Buyers ultimately pay for intermiaries services via increas prices charg by sellers. But an individual buyer cannot escape the cost by declining the intermiary s service since he or she will pay the