The more homogeneous the buyers and sellers, therefore, the greater is the incentive for the intermediator to investigate circumstances for himself.
Firstly, transactions costs incurred by the intermediator in his relations with other parties encourage him to organise production in a particular way.
The market-making intermediator establishes trading links which would not otherwise exist.
Each intermediator also benefits from refusing to negotiate on the quoted price.
These firms are simply an unusually pure form of the market-making intermediator.
Although a leader is an intermediator, he does not need to supervise, and so, unlike a monitor, he does not have to rely upon a hierarchical form.
The intermediator does not intervene in an already existing market so much as set up the market from scratch himself.
Most importantly, the process of negotiation can be accelerated by having an intermediator intervene.
A typical intermediator deals with fewer sources of supply than of demand.
The advantage of the intermediator is that he has a wider vision of the situation than the buyer and seller with whom he trades.
Transitory information must be synthesised on a recurrent basis, however, Each period the intermediator faces the same problem of how to synthesise information on the demand factor and the supply factor in order to decide what output to order and what prices to quote.