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 |
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Pages (from-to) | 55-62 |
Number of pages | 8 |
Journal | Mathematical Social Sciences |
Volume | 73 |
DOIs | |
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