Camera, Gabriele; Reed, Robert R.; Waller, Christopher J. - In: International Economic Review 44 (2003) 4, pp. 1275-1294
We consider a model of decentralized exchange where individuals choose the set of goods they produce. Specialization involves producing a smaller set of goods and doing it more proficiently. In doing so, agents reduce production costs, but also reduce the ease of trading their output. We derive...