In the second chapter we address Hotelling's venerable question about where shops endogenously locate in variety space in an environment that shares certain features of search models of money. Specifically, households are anonymous, have heterogeneous tastes, search is directed, and multilateral matching is possible. We solve for optimal incentive feasible allocations. We implement the solution as a trading post economy. In certain regions of the parameter space, the implementation shares features of a representative agent, cashin- advance model while in other regions implementation of the optimum involves cross-sectional heterogeneity in consumption and production.... seminar participants at Federal Reserve Bank of New York, Brown University, University of Illinois at Urbana-Champaign, Federal Reserve Bank of Richmond, Southern Methodist University and Rice University for their helpful comments.
|Title||:||Essays on Dynamic Markets with Heterogeneous Agents|
|Author||:||Borghan Nezami Narajabad|
|Publisher||:||ProQuest - 2007|