Quota Brokers

18 Pages Posted: 15 Feb 2006

See all articles by Susumu Imai

Susumu Imai

Queen's University - Department of Economics

Kala Krishna

Pennsylvania State University - Department of Economics; National Bureau of Economic Research (NBER)

Abhiroop Mukhopadhyay

Indian Statistical Institute, New Delhi - Delhi Centre

Ling Hui Tan

International Monetary Fund (IMF) - European Department

Date Written: September 2004

Abstract

This paper examines the role of middlemen (brokers) in an imperfect secondary market for quota licenses. Middlemen facilitate trade when markets are thin, as potential buyers and sellers find it difficult to meet and transact directly. However, in thin markets, middlemen also have the ability to influence the terms on which trades occur, and the wedge they create between the buying and selling price limits the extent to which they facilitate trade. We develop and simulate a model of quota broker behavior to examine their welfare implications.

Keywords: Quota licenses, middlemen

JEL Classification: D45, D40

Suggested Citation

Imai, Susumu and Krishna, Kala and Mukhopadhyay, Abhiroop and Tan, Ling Hui, Quota Brokers (September 2004). IMF Working Paper No. 04/179, Available at SSRN: https://ssrn.com/abstract=879004

Susumu Imai (Contact Author)

Queen's University - Department of Economics ( email )

99 University Avenue
Kingston K7L 3N6, Ontario
Canada

HOME PAGE: http://qed.econ.queensu.ca/pub/faculty/imai/

Kala Krishna

Pennsylvania State University - Department of Economics ( email )

523 Kern Graduate Building
University Park, PA 16802-3306
United States
814-865-1106 (Phone)
814-863-4775 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

Abhiroop Mukhopadhyay

Indian Statistical Institute, New Delhi - Delhi Centre ( email )

7 S .J. S.
Sansanwal Marg
New Delhi, 110016
India

Ling Hui Tan

International Monetary Fund (IMF) - European Department ( email )

700 19th St. NW
Washington, DC 20431
United States

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