Abstract
Intermediaries in decentralized markets can affect buyer welfare both directly, by reducing expenses for buyers with high search cost, and indirectly, through a search externality that affects the prices paid by buyers who do not use intermediaries. I investigate the magnitude of these effects in New York City’s trade-waste market, where buyers can search either by themselves or through a waste broker. Combining elements from the empirical search and procurement auction literatures, I construct and estimate a model for a decentralized market. Results from the model show that intermediaries improve welfare and benefit buyers in both the broker and the search markets.