Lotteries are introduced into Cavalcanti and Erosa (2008) , a version of Trejos and Wright (1995)  with aggregate shocks. Lotteries improve welfare and eliminate the two notable features of the optimum with deterministic trades: over-production and history-dependence. Moreover, the optimum can be supported by buyer take-it-or-leave-it offers.
- Aggregate shock
- Optimal allocation
- Random matching model of money
ASJC Scopus subject areas
- Economics and Econometrics