TY - JOUR
T1 - Extracting Interaction-Created Surplus
AU - Spiegler, Ran
N1 - Funding Information:
* This paper is based on a section of my Ph.D. dissertation, currently being written under the supervision of Ariel Rubinstein, to whom I am very grateful. A previous version of the paper was entitled ``Coordination and Matchmakers.'' I also thank Elhanan Ben-Porath, Francis Bloch, K®r Eliaz, Drew Fudenberg, Matthew Jackson, Phillipe Jehiel, Asher Wolin-sky, Ehud Yampuler, Oved Yosha, seminar participants in Tel-Aviv and Northwestern Universities, an anonymous referee, and an associate editor, for their valuable comments. I thank Eddie Dekel for detailed comments on an earlier draft. Financial support from U.S.—Israel Binational Science Foundation, Grant 1011-341, and from the Jack Salzberg Chair in Economic Theory, is gratefully acknowledged.
PY - 2000/1
Y1 - 2000/1
N2 - This paper demonstrates that the economic surplus which agents produce in bilateral interactions is extractable by an outside party having sufficient initial resources. The third party achieves this outcome using a class of "exclusive-interaction" contracts. A basic extractability result is shown to be robust to several extensions: competition among outside parties, multiplicity of interacting agents, and a dynamic extension with repeated opportunities to interact. Finally, some connections with the economic intermediation literature are drawn. Journal of Economic Literature Classification Number: C79
AB - This paper demonstrates that the economic surplus which agents produce in bilateral interactions is extractable by an outside party having sufficient initial resources. The third party achieves this outcome using a class of "exclusive-interaction" contracts. A basic extractability result is shown to be robust to several extensions: competition among outside parties, multiplicity of interacting agents, and a dynamic extension with repeated opportunities to interact. Finally, some connections with the economic intermediation literature are drawn. Journal of Economic Literature Classification Number: C79
KW - Bilateral interactions
KW - Exclusivity contracts
KW - Intermediation
KW - Matchmakers
KW - Middlemen
KW - Surplus-extraction
UR - http://www.scopus.com/inward/record.url?scp=0041911044&partnerID=8YFLogxK
U2 - 10.1006/game.1999.0713
DO - 10.1006/game.1999.0713
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AN - SCOPUS:0041911044
VL - 30
SP - 142
EP - 162
JO - Games and Economic Behavior
JF - Games and Economic Behavior
SN - 0899-8256
IS - 1
ER -