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Andre Trindade (FGV, Brazil)

27 May 2019 @ 12:45 - 13:45



27 May 2019
12:45 - 13:45
Event Category:
Academic Events

“Measuring the Welfare of Intermediaries in Vertical Markets”

Abstract: We empirically investigate the welfare of intermediaries in oligopolistic markets, where intermediaries offer additional services. We exploit the unique circumstance that, in our
empirical setting, consumers can purchase from manufacturers or intermediaries. We specify an equilibrium model, and estimate it using product-level data. The demand
includes consumers with costly search and channel-specific preferences. The supply includes two distribution channels. One features bargaining about wholesale prices
between manufacturers and intermediaries, and price competition among intermediaries. The other is vertically integrated. The model is used to simulate counterfactuals, where
intermediaries do not offer additional services. We find that intermediaries increase welfare.