|
|
|
|
||||
|
||||
Jack of All Trades or a Master of One? Specialization, Trade, and MoneyGabriele CameraEconomics Science Institute, Chapman University; WWZ, University of Basel Robert R. Reed IIIUniversity of Kentucky - Gatton College of Business and Economics Christopher J. WallerUniversity of Notre Dame - Department of Economics International Economic Review, Vol. 44, pp. 1275-1294, November 2003 Abstract: 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 the equilibrium degree of specialization and examine how it is affected by underlying fundamentals. Due to the existence of a hold-up problem, individuals specialize too little relative to the social optimum. Introducing money leads to more specialization relative to barter and increases welfare.
Number of Pages in PDF File: 20 Accepted Paper SeriesDate posted: October 20, 2003Suggested CitationContact Information
|
|
|||||||||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo6 in 0.969 seconds
Add to Cart
