All Rights Reserved
AccessEcon LLC 2006, 2008.
Powered by MinhViet JSC
ralph lauren polo

Tao Peng
''A Note on the implementation of the Pareto efficient allocation in the Lagos-Wright model''
( 2012, Vol. 32 No.1 )
This note modifies Lagos – Wright (2005) by adding subsidies to sellers. We show that this modification can result in a Pareto efficient allocation at the Friedman rule when buyers do not have all the bargaining power. We find that the optimal rate of subsidy is increasing in buyers' relative risk aversion coefficient.
Keywords: The Friedman rule, Pareto efficient allocations, Subsidies
Manuscript Received : Aug 29 2010 Manuscript Accepted : Jan 09 2012

  This abstract has been downloaded 1578 times                The Full PDF of this paper has been downloaded 150350 times