Article ID Journal Published Year Pages File Type
957190 Journal of Economic Theory 2012 7 Pages PDF
Abstract

Lotteries are introduced into Cavalcanti and Erosa (2008) [2], a version of Trejos and Wright (1995) [4] with aggregate shocks. Lotteries improve welfare and eliminate the two notable features of the optimum with deterministic trades: over-production and history-dependence. Moreover, the optimum can be supported by buyer take-it-or-leave-it offers.

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Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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