This book presents a theory of the firm based on its economic role as an intermediary between customers and suppliers. Professor Spulber demonstrates how the intermediation theory of the firm explains firm formation by showing how they arise in a market equilibrium. In addition, the theory helps explain how markets work by showing how firms select market-clearing prices. Models of intermediation and market microstructure from microeconomics and finance shed considerable light on the formation and market making activities of firms. The intermediation theory of the firm is compared to existing economic theories of the firm including the neoclassical, industrial organization, transaction cost, and principal-agent models. This Book Presents A Theory Of The Firm Based On Its Economic Role As An Intermediary Between Customers And Suppliers. Professor Spulber Demonstrates How The Intermediation Theory Of The Firm Explains Firm Formation By Showing Why Firms Arise In A Market Equilibrium With Costly Transactions. In Addition, The Theory Helps Explain How Markets Work By. How Firms Select Market-clearing Prices. Models Of Intermediation And Market Microstructure From Microeconomics And Finance Shed Considerable Light On The Formation And Market-making Activities Of Firms. The Intermediation Theory Of The Firm Is Compared With Existing Economic Theories Of The Firm, Including Neoclassical, Industrial-organization, Transaction-cost, And Principal-agent Models. 1. Market Microstructure And Intermediation -- 2. Price Setting And Intermediation By Firms -- 3. Competition Between Intermediaries -- 4. Intermediation And General Equilibrium -- 5. Matching And Intermediation By. 10. Transaction Costs And The Intermediation Theory Of The Firm -- 11. Agency And The Organizational-incentive Theory Of The Firm -- 12. Agency And The Intermediation Theory Of The Firm. 6. Search And Intermediation By Firms -- 7. Adverse Selection In Product Markets -- 8. Adverse Selection In Financial Markets -- 9. Transaction Costs And The Contractual Theory Of The Firm. Daniel F. Spulber. Includes Bibliographical References (p. 353-368) And Index. This book presents a theory of the firm based on its economic role as an intermediary between customers and suppliers. Professor Spulber demonstrates how the intermediation theory of the firm explains firm formation by showing why firms arise in a market equilibrium with costly transactions. In addition, the theory helps explain how markets work by showing how firms select market-clearing prices. Models of intermediation and market microstructure from microeconomics and finance shed considerable light on the formation and market-making activities of firms. The intermediation theory of the firm is compared with existing economic theories of the firm, including neoclassical, industrial-organization, transaction-cost, and principal-agent models. Spulber presents a theory of the firm based on its economic role as an intermediary between customers and suppliers
