The Essentiality of Money in a Trading Post Economy with Random Matching

Alessandro Marchesiani

No 202223, Working Papers from University of Liverpool, Department of Economics

Abstract: This paper studies how the structure of centralized markets may affect the efficient allocation in anonymous decentralized trades. In line with previous studies, we show that e¢ ciency in decentralized markets can be sustained in a moneyless Önite-number-of-agents setting if agents are patient enough and the price is observed with noise as long as the noise disappears, but not too fast, as the number of agents grows. We also show that the Levine-Pesendorfer noise can be applied to dynamic games, not only to static games.

Keywords: Essentiality of money; anonymity; noisy prices; trading post (search for similar items in EconPapers)
Pages: 21 pages
Date: 2022-09
New Economics Papers: this item is included in nep-gth and nep-mon
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https://www.liverpool.ac.uk/media/livacuk/schoolof ... ney,in,a,Trading.pdf First version, 2022 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:liv:livedp:202223

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