Quantifying the role of brokers in getting rid of duplicated screening: Let us assume that...

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Finance

Quantifying the role of brokers in getting rid of duplicated screening:

Let us assume that 100 men and 100 women are looking for prospective marriage partners. An individual looks for 10 prospective matches among the population and decides to marry one of them. The cost of gathering information on an individual is $10 per person. In the absence of broker, the society in total would pay an aggregate cost.

If there is broker, who is much more experienced, the broker spends $1 per person to gather information. How much does a society save with a broker compared to a society without a broker?

$199,800

$20,000

$19,800

$18,000

$198,000

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