"Trading at All Costs: Intermediaries and Commitment"
Sellers trade an indivisible asset, whose quality is their private information, with competitive buyers. Prior to trading, a stochastic variable shifting the gains from trade is publicly revealed. This “shifter” can be modeled as a component of the buyers' valuation or, equivalently, the cost to find a buyer. Sellers may benefit from committing not to retain high-quality assets upon observing the shifter. Selling via intermediaries provides such commitment. For any distribution of the shifter such that the market never fully unravels, intermediaries improve surplus when many sellers have low private valuation. More risk in the shifter leads to higher markups to intermediaries.