Chapter 15 — Markets and Intermediaries
Part V · The Supply Desk · Week 14
K→𝒢→Q→Ξ
Who keeps the roads. Intermediaries supply transformation — they sell distance — and the concentration that makes them efficient is the same concentration that makes the system fragile.
Learning objectives
- LOS 15.2 — Characterize the intermediary’s product: selling distance.
- LOS 15.3 — State and prove the Concentration–Fragility Theorem.
- LOS 15.6 — Analyze algorithmic intermediaries and the migration of moats.
The laboratory module
Module 15 — The Supply Desk. A moat meter, a concentration game, a zombie desk, and a venue chooser.
The four keepers (Appendix B.6). Each keeper’s fee is bounded by a named second-best:
| Keeper | Product | House number | Bounded by |
|---|---|---|---|
| law firm | menu (SPV suite) | fee ≤ 4 | laminarized menu → 0 |
| arranger | route (program) | moat 0.4–0.6 | sponsor-sale distance |
| dealer / AMM | standing | 0.15 / 0.30 | each other, state by state |
| advisor | awareness | fee ≤ 3.40 | seller’s next-best process |
The advisor’s bound of 3.40 is the conversion value of the auction at the interior optimal field \(n^*=4\): manufactured competition converts 3.40 of the champion buyer’s 5.5 awareness rent into the seller’s price. Summed, the keepers’ fees answer, from the supply side, Chapter 1’s question of where the 5.5 lives.
Guided experiments
- Find the route with the largest moat and name its second-best alternative.
- Move the scope dial until the efficient configuration’s concentration crosses 0.5, and price the planner’s preferred allocation.
- Price the four keepers of the signature network and reproduce their bounds.
ch15 · 8/8 PASS