Bidding for money

Julien, Benoı̂t; Kennes, John; King, Ian

doi:10.1016/j.jet.2006.10.009

Cited by 34 publications

(20 citation statements)

References 20 publications

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“…In equilibrium, all transactions on island  are now spot trades of goods for notes -i.e., it has been fully monetized. This is related to the use of currency in, say, Kiyotaki-Wright (1993) (or, more accurately, since we use partially directed rather than purely random search, versions in Corbae et al 2003or Julien et al 2008), but here we use bank liabilities rather than fiat objects. The difference from most banking theory, including Diamond-Dybvig, is that our bank liabilities are used in transactions.…”

Section: Inside Moneymentioning

confidence: 99%

Banking: A New Monetarist Approach

Mattesini

Monnet

et al. 2012

The Review of Economic Studies

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We develop a theory of banking with two features: (i) banks take deposits and make investments on behalf of depositors; (ii) bank liabilities (claims on deposits) facilitate third-party transactions. Existing models have (i) or (ii), not both, even though they are intimately connected: both originate from limited commitment. We describe an environment, characterize feasible and efficient allocations, and interpret the outcomes as banking arrangements. Banks are essential: without them, the set of feasible allocations is inferior. We show that it can be efficient to sacrifice investment returns in favor of more trustworthy demand deposits. We identify characteristics making for good bankers, and confront these predictions with economic history. * We thank many colleagues for comments and discussions, especially

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Section: Inside Moneymentioning

confidence: 99%

Banking: A New Monetarist Approach

Mattesini

Monnet

et al. 2012

The Review of Economic Studies

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“…The social planner can potentially control both the advertising intensity and the buyers' entry. 15 Buyers' entry is costly. Each buyer incurs a sunk cost k > 0 to enter the market.…”

Section: Advertising Efficiency Without Free-entrymentioning

confidence: 99%

Informative Advertising in Directed Search

2012

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We consider a directed search environment where capacity constrained sellers reach uncoordinated buyers through costly advertising while buyers observed all prices probabilistically. We show that: (i) the equilibrium advertising intensity has an inverted U-shape in market tightness, (ii) the equilibrium advertising intensity is higher under an auction mechanism than under posted pricing, and (iii) the equilibrium price and measure of informed buyers may be positively correlated even in large markets.JEL Classification: E52, E63.

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“…Indeed, the model seller chooses a model buyer at random when more than one. Following the works of [6] and [18], the probability for a buyer to be served when selecting a seller is given by 3…”

Section: Evolutionary Gamementioning

confidence: 99%

Option Fund Market Dynamics for Threshold Public Goods

Dragicevic

2015

Dyn Games Appl

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Economic agents have the possibility to fund the protection of environmental public goods, such as natural ecosystems and biodiversity, facing unknown risks of collapse, which could help to back them up. On the base of the prediction markets, which meet with a degree of success since their introduction, we propose an evolutionary model of an option fund market for the threshold environmental public goods. We consider population dynamics of agents distributed into proportional fair-share contributors and free riders. The model outcomes show that the public goods could be provided when the agents exchanging option contracts are equally divided into buyers and sellers. This result only holds for a specific social belief over the probability of the public good safeguard, the strict equality between bids and asks, and the equality of all payoffs. Otherwise, providing public goods through option markets turns out to be inoperative.

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Bidding for money

Cited by 34 publications

References 20 publications

Banking: A New Monetarist Approach

Banking: A New Monetarist Approach

Informative Advertising in Directed Search

Option Fund Market Dynamics for Threshold Public Goods

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