A backwardly solvable search equilibrium model

Toru 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

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Diamond
Finite horizon
Discrete-time
Multiple equilibria

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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

A backwardly solvable search equilibrium model. / Hokari, Toru; Makioka, Shigeru; Yao, Masayuki.

In: Economics Bulletin, Vol. 33, No. 1, 2013, p. 234-246.

Research output: Contribution to journalArticle

Hokari, T, Makioka, S & Yao, M 2013, 'A backwardly solvable search equilibrium model', Economics Bulletin, vol. 33, no. 1, pp. 234-246.
Hokari, Toru ; Makioka, Shigeru ; Yao, Masayuki. / A backwardly solvable search equilibrium model. In: Economics Bulletin. 2013 ; Vol. 33, No. 1. pp. 234-246.
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