The Six Categories of Risk Bearers and Insulators

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The risk bearer is very much related to being a certifier or enforcer. But it's all about really trying to pull the risk and discern external risk from what I call internal risk, which economists would know as counterparty risk. You want to avoid dealing with people who are known for some park quality or who you can't rely on. And so venture capital,venture capitalist example, that's the kind of risk that they're in a position to embrace because they're building a portfolio.

Why would anyone want to hire a middleman, like a wedding planner, especially if you have time to take care of the planning yourself? Marina Krakovsky, author of The Middleman Economy talks with EconTalk host Russ Roberts about middlemen in the modern economy. Despite predictions that the internet would destroy the need for middlemen, Krakovsky argues they're more valuable than ever though their roles have changed. Krakovsky looks at the different roles middlemen play today and how their value added can justify their existence.