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Multilateral and Bilateral Meetings with Production Heterogeneity

Author

Listed:
  • Klaus Kultti

    (Department of Economics, University of Helsinki, Finland)

  • Toni Riipinen

    (LTT Research Ltd, Finland)

Abstract

We study different trading processes in the context of a search-based model of endogenous money. We incorporate heterogeneity into the model by allowing multiple meetings of agents and divisible production. We then determine the equilibrium using three different trading mechanisms: auctions, pairwise bargaining and price posting. The welfare under these mechanisms is compared using specific functional forms for utility and cost functions. The analysis is done numerically with the bench mark of a social welfare maximising planner.

Suggested Citation

  • Klaus Kultti & Toni Riipinen, 2003. "Multilateral and Bilateral Meetings with Production Heterogeneity," Finnish Economic Papers, Finnish Economic Association, vol. 16(1), pages 27-37, Spring.
    • Handle: RePEc:fep:journl:v:16:y:2003:i:1:p:27-37
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    File URL: http://www.taloustieteellinenyhdistys.fi/images/stories/fep/f2003_1c.pdf
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    References listed on IDEAS

    as
    1. Jansen, Marcel, 2010. "Job auctions and hold-ups," Labour Economics, Elsevier, vol. 17(3), pages 608-619, June.
    2. Trejos, Alberto & Wright, Randall, 1995. "Search, Bargaining, Money, and Prices," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 118-141, February.
    3. Lu, Xiaohua & McAfee, R. Preston, 1996. "The Evolutionary Stability of Auctions over Bargaining," Games and Economic Behavior, Elsevier, vol. 15(2), pages 228-254, August.
    4. Kiyotaki, Nobuhiro & Wright, Randall, 1993. "A Search-Theoretic Approach to Monetary Economics," American Economic Review, American Economic Association, vol. 83(1), pages 63-77, March.
    5. Peters, Michael, 1992. "On the Efficiency of Ex Ante and Ex Post Pricing Institutions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 2(1), pages 85-101, January.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Richard Dutu & Benoit Julien & Ian King, 2009. "Liquidity Constrained Competing Auctions," Department of Economics - Working Papers Series 1068, The University of Melbourne.
    2. Halko, Marja-Liisa & Kultti, Klaus & Niinimaki, Juha-Pekka, 2007. "Evolutionary stability of trading rules in an urn-ball matching model," Research in Economics, Elsevier, vol. 61(1), pages 11-15, March.
    3. Anbarci, Nejat & Dutu, Richard & Feltovich, Nick, 2015. "Inflation tax in the lab: a theoretical and experimental study of competitive search equilibrium with inflation," Journal of Economic Dynamics and Control, Elsevier, vol. 61(C), pages 17-33.

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    More about this item

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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