Valuation equilibria with transactions costs.

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 the...

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Published in:American Economic Review Vol. 85; pp. 287 - 291
Main Authors: Chatterjee, Satyajit, Corbae, Dean
Format: Article
Published: American Economic Association May 1995
Subjects:
Online Access:View this record in EBSCOhost
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        atl: Valuation equilibria with transactions costs.
      aug:
        au:
          Chatterjee, Satyajit
          Corbae, Dean
      su:
        Transaction costs
        Economic equilibrium
        Resource allocation -- Mathematical models
        Valuation
        Mathematical models
      sug:
        subj:
          Transaction costs
          Economic equilibrium
          Resource allocation -- Mathematical models
          Valuation
          Mathematical models
      ab: 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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      doctype: Article
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    language: English
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