I examine the robustness of monetary equilibria in a random matching model where a more efficient mechanism for trade is available. Agents choose between two trading sectors: the search and the intermediated sector. In the former, trade partners arrive randomly and there is a trading...

Random matching models with different states are an important class of dynamic games; for example, money search models, job search models, and some games in biology are special cases. In this paper, we investigate the basic structure of the models: the existence of equilibria, the global...

We analyze monetary exchange in a model that allows for directed search and multilateral matches. We consider environments with divisible goods and indivisible money, and compare the results with those in models that use random matching and bilateral bargaining. Two different pricing mechanisms...

In this short note, I examine the rationality of money-search equilibrium in a basic second-generation money search model, which is a perfectly divisible goods and indivisible money model. I then show that only an inflationary economy can generate a socially and individually rational stable...

We propose a standard search and bargaining model with divisible money, in which only the random matching market opens and the generalized Nash bargaining settles each trade. Assuming fixed production costs, we analytically characterize a tractable equilibrium, called a pay‐all equilibrium ,...