TY - JOUR
T1 - Income distribution, search and market efficiency
AU - Simhon, Avi
AU - Fishman, Arthur
PY - 2011
Y1 - 2011
N2 - This paper explores the relationship between income distribution, prices, production efficiency and aggregate output in a decentralized search economy. We show that income distribution determines how competitive prices are and thereby affects production efficiency and aggregate output. It is shown that, under reasonable assumptions, it is possible to engineer a judicious transfer of income from high to low income individuals, which increases income equality, leads to more competitive prices, and increases aggregate output.
AB - This paper explores the relationship between income distribution, prices, production efficiency and aggregate output in a decentralized search economy. We show that income distribution determines how competitive prices are and thereby affects production efficiency and aggregate output. It is shown that, under reasonable assumptions, it is possible to engineer a judicious transfer of income from high to low income individuals, which increases income equality, leads to more competitive prices, and increases aggregate output.
KW - income distribution
KW - inequality
KW - price dispersion
KW - search
UR - http://www.scopus.com/inward/record.url?scp=79951543643&partnerID=8YFLogxK
U2 - 10.2202/1935-1682.2174
DO - 10.2202/1935-1682.2174
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AN - SCOPUS:79951543643
SN - 1538-0653
VL - 11
JO - B.E. Journal of Economic Analysis and Policy
JF - B.E. Journal of Economic Analysis and Policy
IS - 1
M1 - 8
ER -
