Rehabilitating the intermediary: Brokers and auctioneers in the 19th century Anglo-Indian trade.

The complications of long-distance trade restricted the expansion of the Anglo-Indian trade in the first half of the 19th century. The take-off occurred after 1850, and can be correlated to the growing number of brokers and auctioneers. This paper 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 coordination. These findings positively reassess the importance of these organisations and have implications for understanding the evolution of long-distance trade in the 19th century.