Rehabilitating the intermediary: brokers and auctioneers in the nineteenth-century Anglo-Indian trade

The complications of long-distance trade restricted the expansion of the Anglo-Indian trade in the first half of the nineteenth century. The take-off occurred after 1850, and can be correlated to the growing number of brokers and auctioneers. This article analyses the role and effects of these inter...

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Bibliographic Details
Published in:Business history 2017-05, Vol.59 (4), p.525-553
Main Author: Aldous, Michael
Format: Article
Language:English
Subjects:
19th century
auctioneers
Auctions
brokers
information asymmetry
International trade
Long-distance trade
nineteenth century
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Summary:The complications of long-distance trade restricted the expansion of the Anglo-Indian trade in the first half of the nineteenth century. The take-off occurred after 1850, and can be correlated to the growing number of brokers and auctioneers. This article analyses the role and effects of these intermediaries, drawing on information economics theory. A new data-set shows that volatility in supply, demand and price of indigo was reduced by half as the number of intermediaries quadrupled. Analysis shows that they were uniquely placed to reduce information asymmetries significantly improving market co-ordination. These findings positively reassess the importance of these organisations and have implications for understanding the evolution of long-distance trade in the nineteenth century.
ISSN:0007-6791
1743-7938
DOI:10.1080/00076791.2016.1220939