| Sumario: | For a class of economic environments with transactions costs, a simple reformulation of the commodity space makes it possible to study the transactions-costs economies as particular instances of Gerard Debreu's (1954) valuation equilibrium. In this formulation, consumers are constrained only by their feasible consumption sets and budget sets. Transactions technology is introduced through a firm, and transactions costs are priced through the market. This is similar to a standard general-equilibrium model except that consumers select probability distributions rather than goods. The properties of a valuation equilibrium should facilitate the quantitative study of some types of aggregative problems with transactions costs, but this approach will not be suitable in every case. Specifically, a different theoretical apparatus may be necessary in applications where an explanation of the reason for transactions costs is needed.
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