Trade using assets divisible at a cost

DOI10.1016/0022-0531(87)90059-7MaRDI QIDQ1093507zbMATH OpenOpenAlexFDO

Authors Ramon Marimon, Neil Wallace

Publication date 1987

Published in Journal of Economic Theory (Search for Journal in Brave)

Copyright license Creative Commons Attribution-NonCommercial 4.0 International

Full work available at URL https://doi.org/10.21034/wp.288

zbMATH Keywords

continuum of agentscostly divisibility of assetsoverlapping generationsPareto-ordered equilibriaStationary equilibria

Mathematics Subject Classification ID

General equilibrium theory (91B50) Economic growth models (91B62)

Review text

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.

Recommendations

• Equilibrium using credit or money with indivisible goods
• Buying several indivisible goods
• scientific article; zbMATH DE number 3858790
• Dividend paying assets, the unit root property, and suboptimality
• Asset trading volume in a production economy

Cites work

• scientific article; zbMATH DE number 3547015 (Why is no real title available?)
• scientific article; zbMATH DE number 3274494 (Why is no real title available?)
• scientific article; zbMATH DE number 3396557 (Why is no real title available?)
• scientific article; zbMATH DE number 3399886 (Why is no real title available?)
• On the optimality of equilibrium when the market structure is incomplete

Cited in

(1)

• A theory of optimal denominations for government liabilities

This page was built for publication: Trade using assets divisible at a cost

Report a bug (only for logged in users!)Click here to report a bug for this page (MaRDI item Q1093507)