A Market-Based Solution for Fire Sales and Other Pecuniary Externalities
In economies with a continuum of agents of different types, pecuniary externalities are removed with market exchanges. Agents choose from among various possible prices they want to prevail in the future and buy or sell rights in these market exchanges for future trade. Each agent can choose the exch...
| Main Authors: | , |
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| Other Authors: | |
| Format: | Article |
| Language: | English |
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University of Chicago Press
2021
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| Online Access: | https://hdl.handle.net/1721.1/130506 |
| _version_ | 1826199488242384896 |
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| author | Kilenthong, Weerachart T. Townsend, Robert |
| author2 | Sloan School of Management |
| author_facet | Sloan School of Management Kilenthong, Weerachart T. Townsend, Robert |
| author_sort | Kilenthong, Weerachart T. |
| collection | MIT |
| description | In economies with a continuum of agents of different types, pecuniary externalities are removed with market exchanges. Agents choose from among various possible prices they want to prevail in the future and buy or sell rights in these market exchanges for future trade. Each agent can choose the exchange it wants without regard to what any other agent is doing. But crucially, the right to trade in each and every exchange is priced. The fee structure has a per-unit price and quantity decomposition: a price, as determined by the exchange chosen, times the quantity of rights acquired. |
| first_indexed | 2024-09-23T11:20:42Z |
| format | Article |
| id | mit-1721.1/130506 |
| institution | Massachusetts Institute of Technology |
| language | English |
| last_indexed | 2024-09-23T11:20:42Z |
| publishDate | 2021 |
| publisher | University of Chicago Press |
| record_format | dspace |
| spelling | mit-1721.1/1305062022-10-01T02:59:18Z A Market-Based Solution for Fire Sales and Other Pecuniary Externalities Kilenthong, Weerachart T. Townsend, Robert Sloan School of Management In economies with a continuum of agents of different types, pecuniary externalities are removed with market exchanges. Agents choose from among various possible prices they want to prevail in the future and buy or sell rights in these market exchanges for future trade. Each agent can choose the exchange it wants without regard to what any other agent is doing. But crucially, the right to trade in each and every exchange is priced. The fee structure has a per-unit price and quantity decomposition: a price, as determined by the exchange chosen, times the quantity of rights acquired. 2021-04-22T17:36:02Z 2021-04-22T17:36:02Z 2021-03 2021-04-06T13:55:12Z Article http://purl.org/eprint/type/JournalArticle 0022-3808 1537-534X https://hdl.handle.net/1721.1/130506 Kilenthong, Weerachart T. and Robert M. Townsend. "A Market-Based Solution for Fire Sales and Other Pecuniary Externalities." Journal of Political Economy 129, 4 (April 2021): 981-1010. © 2021 The University of Chicago en https://doi.org/10.1086/712787 Journal of Political Economy Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use. application/pdf University of Chicago Press University of Chicago Press |
| spellingShingle | Kilenthong, Weerachart T. Townsend, Robert A Market-Based Solution for Fire Sales and Other Pecuniary Externalities |
| title | A Market-Based Solution for Fire Sales and Other Pecuniary Externalities |
| title_full | A Market-Based Solution for Fire Sales and Other Pecuniary Externalities |
| title_fullStr | A Market-Based Solution for Fire Sales and Other Pecuniary Externalities |
| title_full_unstemmed | A Market-Based Solution for Fire Sales and Other Pecuniary Externalities |
| title_short | A Market-Based Solution for Fire Sales and Other Pecuniary Externalities |
| title_sort | market based solution for fire sales and other pecuniary externalities |
| url | https://hdl.handle.net/1721.1/130506 |
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