A commodity-money refinement in matching models

Neil Wallace, Tao Zhu

Research output: Contribution to journalArticle

18 Scopus citations

Abstract

We apply a commodity-money refinement to matching models in which people meet in pairs and buyers make take-it-or-leave-it offers to sellers. The refinement is applied by attaching a utility value to nominal money and letting that value approach zero. An equilibrium satisfies the refinement if it is such a limit. We show that the refinement eliminates a class of non-full-support steady states.

Original languageEnglish (US)
Pages (from-to)246-258
Number of pages13
JournalJournal of Economic Theory
Volume117
Issue number2
DOIs
StatePublished - Aug 1 2004

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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