Efficiency and marginal cost pricing in dynamic competitive markets with friction

Artikel

This paper examines a dynamic general equilibrium model with supply friction. With or without friction, the competitive equilibrium is efficient. Without friction, the market price is completely determined by the marginal production cost. If friction is present, no matter how small, then the market price fluctuates between zero and the "choke-up" price, without any tendency to converge to the marginal production cost, exhibiting considerable volatility. The distribution of the gains from trading in an efficient allocation may be skewed in favor of the supplier, although every player in the market is a price taker.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Journal: Theoretical Economics ; ISSN: 1555-7561 ; Volume: 5 ; Year: 2010 ; Issue: 2 ; Pages: 215-239 ; New Haven, CT: The Econometric Society

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Market Structure, Pricing, and Design: Perfect Competition ; Exchange and Production Economies
• Thema: Dynamic general equilibrium model with supply friction ; choke-up price ; marginal production cost ; welfare theorems

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Cho, In-Koo ; Meyn, Sean P.
• Ereignis: Veröffentlichung
• (wer): The Econometric Society
• (wo): New Haven, CT
• (wann): 2010

Weitere Informationen

• DOI: doi:10.3982/TE324
• Handle: http://hdl.handle.net/10419/150137
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ