Trade using assets divisible at a cost (Q1093507): Difference between revisions
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Latest revision as of 10:08, 25 September 2024
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English | Trade using assets divisible at a cost |
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Trade using assets divisible at a cost (English)
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1987
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The consequences of costly divisibility of assets are studied using a model with the following features. The demand for assets is generated from an overlapping generations model with a continuum of agents in each generation and with intrageneration trade (intermediation) ruled out. There is a once-for-all supply of a stock of nonnegative-dividend assets in a large size, and there is a costly technology for dividing them into smaller sizes. Stationary equilibria are shown to exist. In contrast with similar models with costless divisibility of assets, competitive equilibria are not necessarily desirable; there can be Pareto-ordered equilibria.
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costly divisibility of assets
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overlapping generations
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continuum of agents
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Stationary equilibria
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Pareto-ordered equilibria
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