These fixed costs are private information. While heterogeneity of fixed costs generates variation in an entrepreneur's decision of whether to start up their productive technology, those entrepreneurs who decide to undertake production choose to demand identical amounts of labor. They need to finance labor demand through borrowing in excess of their internal funds. This will give rise to increasing returns to scale in the intermediation sector. Given this environment, the economy is organized as follows.
Workers supply labor to firms in return for nonstorable goods.
Saving can be accomplished through the money market or an intermediary. Entrepreneurs who undertake production can borrow funds from an intermediary. Once the fixed cost is covered, each coalition member receives a return per unit deposited equal to the return on loans. Given that these rules are anticipated, young agents simultaneously decide whether to hold money or join an intermediary coalition. As a consequence of this strategic complementarity, there can be multiple steady state equilibria in this economy.