Bardhan, Pranab; Mookherjee, Dilip; Tsumagari, Masatoshi - In: American Economic Journal: Microeconomics 5 (2013) 4, pp. 81-119
We study a competitive theory of middlemen with brand-name reputations necessary to overcome product quality moral hazard problems. Agents with heterogeneous abilities sort into different sectors and occupations. Middleman margins do not equalize across sectors if production of different goods...