Working Paper: NBER ID: w29259
Authors: Alessandro Gavazza; Alessandro Lizzeri
Abstract: This is an invited chapter for the forthcoming Volume 4 of the Handbook of Industrial Organization. We focus on markets with frictions, such as transaction costs, asymmetric information, search and matching frictions. We discuss how such frictions affect allocations, favor the emergence of intermediaries or dealers, and potentially create market power. Our focus is mostly on markets with many participants rather than on transactions that are bilateral or involve a small number of players.
Keywords: No keywords provided
JEL Codes: L0; L1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| transaction costs (D23) | allocations (H77) |
| transaction costs (D23) | incentives (M52) |
| transaction costs (D23) | inefficiencies in trade (F12) |
| transaction costs (D23) | emergence of intermediaries (D40) |
| emergence of intermediaries (D40) | facilitation of transactions (L14) |
| transaction costs (D23) | quality consumed (L15) |