Brokers Who Do Not Bridge

Structural theories describe economic brokerage as an opportune but fragile position bridging gaps between otherwise disconnected actors. In that view, brokering can undermine trust or eliminate the gaps that generate its value, and brokers need supporting institutions or deeper interpersonal ties to stabilize their role. Yet many corporate actors in positions of brokerage, from Visa to Amazon, have risen in market power, profit, and prominence even as networks transformed around them. When can brokering strengthen rather than undermine a broker’s advantage?

I reconceptualize brokerage as outsourced relational work, in which the broker assumes no inventory risk and constructs viable matches between parties who cannot easily find or evaluate one another. Repeated matchmaking generates an informational byproduct that the broker can accumulate: knowledge of what makes pairings successful across the market, unavailable to clients who observe only their own dealings. An agent-based model of a matching market identifies conditions under which this informational advantage emerges and persists. Brokerage can provide assessment rather than access: clients outsource matching even when they can reach counterparties themselves, because the broker’s predictions are valuable. Counterintuitively, the broker can become most central in regimes where it engages in the least bridging behavior: broker centrality is a product, not a primary source, of matchmaking quality.

While the model explores the dynamics of the broker’s informational advantage, I theorize how this advantage can support a transition from intermediation to capture by the broker, as the broker becomes a principal selling the resource it once intermediated or monetizing data and analytics. Brief examples illustrate this transition. This is transient brokerage, a process that highlights how brokerage can disappear because of the broker’s growing power rather than its fragility.