Non-robustness of the cash-in-advance equilibrium in the trading post model

R. Vijay Krishna ()
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R. Vijay Krishna: University of Edinburgh

Economics Bulletin, 2005, vol. 5, issue 3, 1-5

Abstract: The 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.

JEL-codes: E4 (search for similar items in EconPapers)
Date: 2005-01-10
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