The power of the middleman — a theoretical analysis

In this article, I present a technique, multiple general equilibrium analysis (multiple GEA), based on Coleman's (1990) general equilibrium analysis (GEA), for determining the distribution of power among members of a positively connected network in which middlemen mediate the transfer of resources. In line with earlier simulation and experimental studies, multiple GEA indicates that middlemen actors gain considerable power and resources from their structural position. Results also show that, under the assumptions of multiple GEA, actors’ relative power can vary considerably depending on the configuration of actor interests. Unlike previous uses of GEA to analyze such networks, the results follow without needing to use ad hoc factors, or to give middlemen actors initial control over any resource.

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