An Analytical Model of Search and Bargaining with Divisible Money
Kazuya Kamiya and
So Kubota ()
No 53, TUPD Discussion Papers from Graduate School of Economics and Management, Tohoku University
Abstract:
We propose a standard search and bargaining model with divisible money, in which only the random matching market opens and the generalized Nash bargaining settles each trade. Assuming fixed production costs, we analytically characterize a tractable equilibrium, called a pay-all equilibrium, and prove its existence. Each buyer pays all the money holding as a corner solution to the bargaining problem and each seller produces a positive amount of goods as an interior solution. The bargaining power parameter affects the distribution of the money holdings and possibly induces economic inefficiency. We propose a redistributional monetary transfer that adjusts the bargaining outcome and improves the allocation efficiency. Moreover, we analyze a temporary expansion of the money supply that increases social welfare through a redistribution.
Pages: 65 pages
Date: 2024-09-06
New Economics Papers: this item is included in nep-dge, nep-gth, nep-inv and nep-mon
References: Add references at CitEc
Citations:
Downloads: (external link)
http://hdl.handle.net/10097/0002002518
Related works:
Journal Article: An analytical model of search and bargaining with divisible money (Forthcoming) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:toh:tupdaa:53
Access Statistics for this paper
More papers in TUPD Discussion Papers from Graduate School of Economics and Management, Tohoku University Contact information at EDIRC.
Bibliographic data for series maintained by Tohoku University Library ().