Medieval market making brokerage regulations in Central Western Europe, ca. 1250-1700

This paper examines brokerage regulations in Central and Western Europe from approximately 1250 to 1700. Based on a sample of 70 cities with more than 1609 sets of regulations, we find that brokerage was a multifunctional institution, which served matchmaking, quality certification, and tax collection functions, mainly in product wholesale markets but also in finance and real estate markets. We argue that the implementation of regulations for matchmaking and certification solved incentive problems related to asymmetric information between buyers and sellers, consequently improving the allocation process and fostering trade. In line with these results, we find that most brokerage regulations occur along trade routes and in merchant towns.