Intermediation can play an important role in the process through which consumers obtain information. Section 23.1 deals with a number of situations where consumers can access and process information more efficiently if they use the services of an intermediary. First, we consider situations in which consumers may suffer from information overload and in which an information gatekeeper is valuable for consumers. Second, we analyse the role of gatekeepers who provide price information in search markets. Third, we turn to the possibility that the intermediary, through the installation of a recommender system, allows consumers to perform directed search. This potentially allows consumers to drastically reduce their search efforts to obtain the products they like.

In Section 23.2, we turn to asymmetric information problems. We first analyse whether and how an intermediary can alleviate asymmetric information problems between firms and consumers. Possibly, the intermediary can act as a certifier. There is, however, the risk that the intermediary simply extracts rents from the market without providing any services. We then turn to the analysis of reputation systems where it is not the intermediary's information disclosure but the previous experience of other consumers that allows consumers to make better informed choices, thereby alleviating asymmetric information problems.

Intermediation and information

Intermediaries that act as information distributors play an increasingly important role, since consumers are limited in their capability to process information.