Market Microstructure, Middlemen Organizations and Firm Theory

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Features: Frontier of Economic Science Translation Series. Since Professor Coase's classic paper "The Nature of the Firm" was published in 1937, it has been frequently cited by later scholars naturally because successors have not surpassed the problems Coase raised, rather than surpassing his theory. The author of this book, Professor Spulber, proposes a theory of the firm that understands its economic role as an intermediary between customers and suppliers. He systematically argues why firms exist in a market equilibrium with transaction costs and explains how the intermediary theory of the firm accounts for the emergence of firms. His new work provides a clear exposition of the existing literature on these issues. Moreover, Spulber's theory helps explain how markets operate by illustrating how firms choose market-clearing prices. Specifically, he delves into the formation of firms and the activities of market-making, starting from the intermediary models established in microeconomics and finance, as well as the microstructure models of markets. This book also compares the intermediary theory of the firm with existing theories of the firm, including neoclassical, industrial organization, transaction cost, and principal-agent models, and offers a new, rich theoretical analysis of the role firms play in markets.