This article presents a general equilibrium model in which middlemen emerge to facilitate trade in an environment of idiosyncratic tastes and heterogeneous goods. The gains to the traders can be measured along three dimensions: the rate of production, the time-preference losses generated by the...

There can be no doubt that electronic commerce will become increasingly important to our economic well‐being in the decade ahead. It will allow people and organisations to conduct their current commerce electronically, and it will usher in new patterns of commerce as people identify and take...

The stationary equilibrium of an overlapping generations economy in which agents trade a single asset is examined. If agents live for only two periods, the selling prices follow an identically and independently distributed process. If agents live for more than two periods, the selling prices...

A two-state model of strikes in which both the entrepreneur and the worker randomize their behavior is developed. The entrepreneur always asks for a wage reduction unaccompanied by a cut in labor services if the state is bad and he sometimes makes the same request in the good state. The worker...

This paper develops a model in which competing governments offer financial incentives to induce individual firms to locate within their jurisdictions. Equilibrium is described under three specifications of the supplementary taxes. There is no misallocation of capital under two of these...