Matching markets with middlemen under transferable utility
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Abstract: This paper studies matching markets in the presence of middlemen. 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. Direct trade between a buyer and a seller is costlier than a trade mediated by a middleman. For each such market, we examine an associated cooperative game with transferable utility. First, we show that an optimal matching for a matching market with middlemen can be obtained by considering the two-sided assignment market where each buyer-seller pair is allowed to use the mediation service of the middlemen free of charge and attain the maximum surplus. Second, we prove that the core of a matching market with middlemen is always non-empty. Third, we show the existence of a buyer-optimal core allocation and a seller-optimal core allocation. In general, the core does not exhibit a middleman-optimal matching. Finally, we establish the coincidence between the core and the set of competitive equilibrium payoff vectors.
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Cites work
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Cited in
(8)- Middlemen in the Shapley-Shubik competitive markets
- Trade through endogenous intermediaries
- scientific article; zbMATH DE number 2165201 (Why is no real title available?)
- MEDIEVAL MATCHING MARKETS
- Optimization methods and algorithms
- Overview of Hungarian operations research based on the VOCAL 2022 conference
- The game of agents in transportation problems
- Matching heterogeneous traders in quantity-regulated markets
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