Brokerage rents and intermediation networks

Syngjoo Choi, Sanjeev Goyal, Frédéric Moisan

Research output: Contribution to journalArticlepeer-review


This paper provides experimental evidence on the economic determinants of intermediation networks by considering two pricing rules—respectively, criticality and betweenness—and three group sizes of subjects—10, 50, and 100 subjects. We find that when brokerage benefits accrue only to traders who lie on all paths of intermediation, stable networks involve interconnected cycles, and trading path lengths grow while linking and payoff inequality remain modest as the number of traders grows. By contrast, when brokerage benefits are equally distributed among traders on the shortest paths, stable networks contain a few hubs that provide the vast majority of links, and trading path lengths remain unchanged while linking and payoff inequality explode as the number of traders grows.

Original languageEnglish (US)
Article numbere2301929120
JournalProceedings of the National Academy of Sciences of the United States of America
Issue number28
StatePublished - Jul 11 2023


  • brokerage
  • inequality
  • intermediation
  • linking

ASJC Scopus subject areas

  • General


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