Matching models with a conservation law: The existence and global structure of the set of stationary equilibria

Kazuya Kamiya and Adolphus Talman

Journal of Mathematical Economics, 2009, vol. 45, issue 5-6, 397-413

Abstract: We study random matching models where there is a set of infinitely lived agents, and in each period agents are pairwise matched to each other and play a stage game. We investigate the basic structure of equilibria in such models: the existence of equilibria and the global structure of the set of equilibria. Specifically, we focus on models with a conservation law, which typically holds in economies having some assets, such as money. In such models, under certain regularity conditions the set of equilibria is one-dimensional and each connected component of it is a piecewise smooth one-dimensional manifold being homeomorphic to either the unit circle or the unit interval. Moreover, in an endpoint of an interval all agents have the same amount of assets.

Keywords: Matching; model; Money; Stationary; Markov; perfect; equilibria; Non-linear; complementarity; problem (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:45:y:2009:i:5-6:p:397-413

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