A backwardly solvable search equilibrium model

Torn Hokari, Shigeru Makioka, Masayuki Yao

Research output: Contribution to journalArticle

Abstract

So-called "search equilibrium models" typically have multiple equilibria. In almost all studies on these models, only steady states are considered mainly because it is difficult to find non-stationary equilibria. This difficulty does not disappear even if we consider finite-horizon versions of these models. In this note, we propose an approach that might be useful to study non-stationary equilibria in these models. In particular, we consider a discrete-time and finitehorizon version of Diamond's (1982. JPE) model and show how to solve it backwardly. As an illustration, we compute a non-stationary equilibrium of a specific example, which exhibits a three-period cycle.

Original languageEnglish
Pages (from-to)234-246
Number of pages13
JournalEconomics Bulletin
Volume33
Issue number1
Publication statusPublished - 2013 Aug 30

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

Fingerprint Dive into the research topics of 'A backwardly solvable search equilibrium model'. Together they form a unique fingerprint.

  • Cite this

    Hokari, T., Makioka, S., & Yao, M. (2013). A backwardly solvable search equilibrium model. Economics Bulletin, 33(1), 234-246.