Non-robustness of the Cash-in-Advance Equilibrium in the Trading-Post Model
AbstractThe main justification for cash-in-advance (CIA) equilibria when there are multiple assets is a Shapley-Shubik trading-post model where the agents coordinate on a particular medium of exchange. Of course, there are other equilibria. We introduce a refinement and show that the CIA equilibrium does not satisfy our refinement while there exist equilibria that do.
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Bibliographic InfoPaper provided by Pennsylvania State University, Department of Economics in its series Working Papers with number 9-03-2.
Date of creation: Sep 2003
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