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

Pidong Huang, Yoske Igarashi

    Research output: Contribution to journalArticlepeer-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 languageEnglish
    Pages (from-to)55-62
    Number of pages8
    JournalMathematical Social Sciences
    Volume73
    DOIs
    Publication statusPublished - 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

    Fingerprint

    Dive into the research topics of 'Trejos-Wright with a 2-unit bound: Existence and stability of monetary steady states'. Together they form a unique fingerprint.

    Cite this