A Dynamic Equilibrium Model of Search, Bargaining, and Money

Melvyn G. Coles, Randall Wright

Research output: Contribution to journalArticlepeer-review


This paper considers dynamic equilibria in a model with random matching, strategic bargaining, and money. Equilibrium in the bargaining game is characterized in terms of a simple differential equation. When we embed this characterization into the monetary economy, the model can generate outcomes such as limit cycles that never arise if one imposes a myopic Nash bargaining solution, as has been done in the past.Journal of Economic LiteratureClassification Numbers: C78, D83, E31.

Original languageEnglish (US)
Pages (from-to)32-54
Number of pages23
JournalJournal of Economic Theory
Issue number1
StatePublished - Jan 1998

ASJC Scopus subject areas

  • Economics and Econometrics


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