Market evolution and economic development: The evolution of impersonal markets

This paper seeks to integrate the concepts of embedded exchange and imperso nal exchange via the notion of integrated markets. The more integrated mark et exchange is, the more likely that each potential actor in the. exchange process is linked to a large number of others. As a result, it is less like ly that buyers and sellers will choose to cheat each other, and market exch ange thrives. Integration occurs as a result of bridging structural holes i n social networks and is carried out by entrepreneurial middlemen. Their ac tivities are characterized by significant increasing returns to scale. Thus coordination is likely to be necessary for integrated markets to develop.