Please use this identifier to cite or link to this item:
https://doi.org/10.1257/mic.20190344
Title: | Intermediation and Steering: Competition in Prices and Commissions | Authors: | Teh, TH Wright, J |
Issue Date: | 1-Jan-2022 | Publisher: | American Economic Association | Citation: | Teh, TH, Wright, J (2022-01-01). Intermediation and Steering: Competition in Prices and Commissions. American Economic Journal: Microeconomics 14 (2) : 281-321. ScholarBank@NUS Repository. https://doi.org/10.1257/mic.20190344 | Abstract: | We explore the implications of steering by an informed profit-maximizing intermediary. The intermediary steers consumers by recommending firms, taking into account both the commissions firms offer and the prices they set. Such steering results in higher commissions and consumer prices, so that consumers only benefit from intermediation when their search cost is sufficiently high. Steering reverses the normal relationship between competition and price, with prices increasing in the number of competing firms. We use the framework to study various policies including commission caps (absolute or relative), commission disclosure, promoting information provision, and penalties for inappropriate advice | Source Title: | American Economic Journal: Microeconomics | URI: | https://scholarbank.nus.edu.sg/handle/10635/246870 | ISSN: | 1945-7669 1945-7685 |
DOI: | 10.1257/mic.20190344 |
Appears in Collections: | Staff Publications Elements Students Publications |
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File | Description | Size | Format | Access Settings | Version | |
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Steering AEJ format 200306.pdf | Accepted version | 394.13 kB | Adobe PDF | OPEN | Post-print | View/Download |
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