Article ID: | iaor2005611 |
Country: | Finland |
Volume: | 16 |
Issue: | 1 |
Start Page Number: | 27 |
End Page Number: | 37 |
Publication Date: | Jan 2003 |
Journal: | Finnish Economic Papers |
Authors: | Kultti Klaus, Riipinen Toni |
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 benchmark of a social welfare maximising planner.