DP16542 Frictions in Product Markets
|Author(s):||Alessandro Gavazza, Alessandro Lizzeri|
|Publication Date:||September 2021|
|Keyword(s):||frictions, intermediaries, market power|
|JEL(s):||D23, D82, D83, L1|
|Programme Areas:||Industrial Organization|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=16542|
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.