A simple search model of money with heterogeneous agents and partial acceptability
AbstractSimple search models have equilibria where some agents accept money and others do not. We argue such equilibria should not be taken seriously. This is unfortunate if one wants a model with partial acceptability. We introduce heterogeneous agents and show partial acceptability arises naturally and robustly. There can be multiple equilibria with different degrees of acceptability. Given the type of heterogeneity we allow, the model is simple: equilibria reduce to fixed points in [0,1]. We show that with other forms of heterogeneity equilibria are fixed points in set space, and there is no method to reduce this to a problem in R 1 . Copyright Springer-Verlag Berlin/Heidelberg 2004
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Bibliographic InfoArticle provided by Springer in its journal Economic Theory.
Volume (Year): 24 (2004)
Issue (Month): 4 (November)
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Web page: http://link.springer.de/link/service/journals/00199/index.htm
Other versions of this item:
- Andrei Shevchenko & Randall Wright, 2002. "A simple search model of money with heterogeneous agents and partial acceptability," Working Paper 0207, Federal Reserve Bank of Cleveland.
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- Trejos, Alberto & Wright, Randall, 1995. "Search, Bargaining, Money, and Prices," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 118-41, February.
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- Colacelli, Mariana & Blackburn, David J.H., 2009. "Secondary currency: An empirical analysis," Journal of Monetary Economics, Elsevier, vol. 56(3), pages 295-308, April.
- Masters, Adrian, 2008. "Unpleasant middlemen," Journal of Economic Behavior & Organization, Elsevier, vol. 68(1), pages 73-86, October.
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