This paper studies security markets with trading frictions, and offers a complete characterization of viable convex cost systems. For frictional markets that give rise to a convex-cone traded-payoff span and a sublinear payoff cost functional, the following three conditions are equivalent:...

This paper constructs a representative agent supporting the equilibrium allocation in ¡°event-tree¡± economies with time-additive preferences and possibly incomplete securities markets. If the equilibrium allocation is Pareto optimal, this construction gives the usual linear welfare...

In this paper I construct a search monetary model with capital accumulation where money and goods are both divisible. Agents in matches determine the terms of trade through a sequential bargaining process and they face trading restrictions that require the quantity of money traded not to exceed...