Money and price dynamics in a market with strategic bargaining
AbstractThis paper studies a strategic bargaining model of money and prices to complement the results reported in Coles and Wright (1998). The probability of a bargaining breakdown is chosen to be consistent with market conditions in the spirit of Rubinstein and Wolinsky (1985). The unique monetary steady state coincides with the one under asymmetric Nash bargaining. The dynamics of the price level are determined without any reference to the value of search. The dynamic properties of the model resemble those of traditional monetary models.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 30 (2010)
Issue (Month): 1 ()
Contact details of provider:
money; bargaining; price dynamics.;
Find related papers by JEL classification:
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
- E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rubinstein, Ariel & Wolinsky, Asher, 1985.
"Equilibrium in a Market with Sequential Bargaining,"
Econometric Society, vol. 53(5), pages 1133-50, September.
- Arial Rubinstein & Asher Wolinsky, 1985. "Equilibrium in a Market with Sequential Bargaining," Levine's Working Paper Archive 623, David K. Levine.
- Ariel Rubinstein, 2010.
"Perfect Equilibrium in a Bargaining Model,"
Levine's Working Paper Archive
661465000000000387, David K. Levine.
- Melvyn Cole & Randall Wright, .
"A Dynamic Equilibrium Model of Search, Bargaining, and Money,"
CARESS Working Papres
97-9, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
- Coles, Melvyn G. & Wright, Randall, 1998. "A Dynamic Equilibrium Model of Search, Bargaining, and Money," Journal of Economic Theory, Elsevier, vol. 78(1), pages 32-54, January.
- Brock, William A., 1975. "A simple perfect foresight monetary model," Journal of Monetary Economics, Elsevier, vol. 1(2), pages 133-150, April.
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