Coalition-Proof Trade and the Friedman Rule in the Lagos-Wright Model

S-Tier
Journal: Journal of Political Economy
Year: 2009
Volume: 117
Issue: 1
Pages: 116-137

Authors (3)

Tai-wei Hu (not in RePEc) John Kennan (University of Wisconsin-Madiso...) Neil Wallace (not in RePEc)

Score contribution per author:

2.681 = (α=2.01 / 3 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

The Lagos-Wright model-a monetary model in which pairwise meetings alternate in time with a centralized meeting-has been extensively analyzed, but always using particular trading protocols. Here, trading protocols are replaced by two alternative notions of implementability: one that allows only individual defections and one that also allows cooperative defections in meetings. It is shown that the first-best allocation is implementable under the stricter notion without taxation if people are sufficiently patient. And, if people are free to skip the centralized meeting, then lump-sum taxation used to pay interest on money does not enlarge the set of implementable allocations. (c) 2009 by The University of Chicago. All rights reserved.

Technical Details

RePEc Handle
repec:ucp:jpolec:v:117:y:2009:i:1:p:116-137
Journal Field
General
Author Count
3
Added to Database
2026-01-25