Auctions, Intermediaries and Innovation
Chapter 4: Technology Market Intermediaries
4.1 THE ORIGIN OF THE INTERMEDIARY CONCEPT According to van Lente et al. (2003: 251) referring to Smits (2002), the ‘growing importance of intermediaries in innovation processes relates to a key trend of the last decades to involve more actors and factors in R&D activities’. As auction firms represent a particular type of technology market intermediary (TMI), this study requires a deeper understanding of this actor type. The intermediary concept originates from financial economics. The New Palgrave Dictionary of Money & Finance defines intermediaries according to Tobin (1992: 77f): Enterprises in the business of buying and selling financial assets… are not just middlemen like transactioners and brokers whose main business is to execute transactions for clients…[They] do much more than participate in organized markets…[by] adding ‘markets’ that would not exist without them…[and they] do take risks. To gain a better understanding of the role of intermediaries, Sauermann (2000) proposes a helpful typology. This typology is grounded in the following argumentation that the share of variable transaction costs are usually lower in highly organized markets than less organized markets. Therefore, a higher organizational degree causes additional (mainly fixed) costs. The optimal ratio of fixed and variable costs is determined mainly by the properties of the traded asset (for example, its degree of standardization and divisibility) as well as of the market actors (for example, the number of actors, their degree of professionalism, and transaction frequency). Closely related to this issue is the configuration of a management system to...
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