Trejos-Wright with a 2-unit bound: Existence and stability of monetary steady states

Pidong Huang; Yoske Igarashi

doi:10.1016/j.mathsocsci.2014.11.004

Trejos-Wright with a 2-unit bound: Existence and stability of monetary steady states

Pidong Huang, Yoske Igarashi

Research output: Contribution to journal › Article › peer-review

2 Citations (Scopus)

Abstract

This paper investigates a Trejos-Wright random matching model of money with a consumer take-it-or-leave-it offer and with individual money holdings in the set {0, 1, 2}. It is shown that three kinds of monetary steady states exist generically: (1) pure-strategy full-support steady states, (2) mixed-strategy full-support steady states, and (3) non-full-support steady states. A full-support steady state exists if and only if a non-full-support steady state exists. Stability of these steady states is also studied. Both pure-strategy and mixed-strategy full-support steady states are locally stable. However, non-full-support steady states are unstable.

Original language	English
Pages (from-to)	55-62
Number of pages	8
Journal	Mathematical Social Sciences
Volume	73
DOIs	https://doi.org/10.1016/j.mathsocsci.2014.11.004
Publication status	Published - 2015 Jan 1

Bibliographical note

Publisher Copyright:
© 2014 Elsevier B.V.

ASJC Scopus subject areas

Sociology and Political Science
General Social Sciences
General Psychology
Statistics, Probability and Uncertainty

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title = "Trejos-Wright with a 2-unit bound: Existence and stability of monetary steady states",

abstract = "This paper investigates a Trejos-Wright random matching model of money with a consumer take-it-or-leave-it offer and with individual money holdings in the set {0, 1, 2}. It is shown that three kinds of monetary steady states exist generically: (1) pure-strategy full-support steady states, (2) mixed-strategy full-support steady states, and (3) non-full-support steady states. A full-support steady state exists if and only if a non-full-support steady state exists. Stability of these steady states is also studied. Both pure-strategy and mixed-strategy full-support steady states are locally stable. However, non-full-support steady states are unstable.",

author = "Pidong Huang and Yoske Igarashi",

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AU - Igarashi, Yoske

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N2 - This paper investigates a Trejos-Wright random matching model of money with a consumer take-it-or-leave-it offer and with individual money holdings in the set {0, 1, 2}. It is shown that three kinds of monetary steady states exist generically: (1) pure-strategy full-support steady states, (2) mixed-strategy full-support steady states, and (3) non-full-support steady states. A full-support steady state exists if and only if a non-full-support steady state exists. Stability of these steady states is also studied. Both pure-strategy and mixed-strategy full-support steady states are locally stable. However, non-full-support steady states are unstable.

AB - This paper investigates a Trejos-Wright random matching model of money with a consumer take-it-or-leave-it offer and with individual money holdings in the set {0, 1, 2}. It is shown that three kinds of monetary steady states exist generically: (1) pure-strategy full-support steady states, (2) mixed-strategy full-support steady states, and (3) non-full-support steady states. A full-support steady state exists if and only if a non-full-support steady state exists. Stability of these steady states is also studied. Both pure-strategy and mixed-strategy full-support steady states are locally stable. However, non-full-support steady states are unstable.

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SN - 0165-4896

VL - 73

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EP - 62

JO - Mathematical Social Sciences

JF - Mathematical Social Sciences

ER -

Trejos-Wright with a 2-unit bound: Existence and stability of monetary steady states

Abstract

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ASJC Scopus subject areas

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