This paper adopts mechanism design to investigate the coexistence of fiat money and higher-return assets. We consider an economy with pairwise meetings where fiat money and risk-free capital compete as means of payment, as in [28]. The trading mechanism in pairwise meetings is chosen among all...

I apply mechanism design to quantify the cost of inflation that can be attributed to monetary frictions alone. In an environment with pairwise meetings, the money demand that is consistent with an optimal, incentive feasible allocation takes the form of a continuous correspondence that can fit...

A prominent feature of the Kiyotaki–Wright model of commodity money is multiplicity of dynamic equilibria. We show that the extent of multiplicity hinges on the frequency of search. Holding fixed the average number of meetings over time, we vary search frequency by altering the interval...

We introduce incomplete information to centralized many-to-one matching markets. This is important because in real life markets (i) any agent is uncertain about the other agents' true preferences and (ii) most entry-level matching is many-to-one (and not one-to-one). We show that given a common...

This paper considers marriage problems, roommate problems with nonempty core, and college admissions problems with responsive preferences. All stochastically stable matchings are shown to be contained in the set of matchings which are most robust to one-shot deviation.

We analyze a complete information multilateral bargaining model in which a buyer is to purchase two complementary goods from two sellers. Binding cash-offer contracts are used to govern transactions. In contrast to preexisting literature, we do not normalize the parties' reservation utilities to...

We consider a one-sided assignment market or exchange network with transferable utility and the dynamics of bargaining in such a market. Our dynamical model is local, involving iterative updates of ‘offers’ based on estimated best alternative matches, in the spirit of pairwise Nash...

We introduce a matching model in which agents engage in joint ventures via multilateral contracts. This approach allows us to consider production complementarities previously outside the scope of matching theory. We show analogues of the first and second welfare theorems and, when agents'...

In a market in which sellers compete by posting mechanisms, we study how the properties of the meeting technology affect the mechanism that sellers select. In general, sellers have incentive to use mechanisms that are socially efficient. In our environment, sellers achieve this by posting an...

I examine the consequences of letting players compete for bargaining power in a multilateral bargaining game. In each period, the right to propose an offer is sold to the highest bidder, and all players pay their bids. If players vote according to any rule in which no player has veto power, then...