Necessity of transversality conditions for stochastic problems

Article Abstract:

The stochastic versions of Michel's necessity result, a generalization of the TVC results of Weitzman and Ekeland and Scheinkman, and Kamihigashi's result, which is useful particularly in the case of homogeneous returns, is discussed. These stochastic extensions are established for an extremely general stochastic reduced-form model that assumes neither differentiability nor continuity.

Stochastic processes

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A rudimentary random-matching model with divisible money and prices

Article Abstract:

A continuum of stationary equilibria, transactions of which occur at a fixed price, is found to exist a schematic version of a search equilibrium mode with divisible money. The equilibrium may be viewed either as a situation where there is an exogenous parity between money and goods or a situation and the exact single-price equilibrium is a consequence of the model's extreme features.

Econometrics & Model Building, Analysis, Econometrics, Money supply, Business models

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Implementing efficient allocations in a model of financial intermediation

Article Abstract:

In a finite trader version of the Diamond and Dybvig model, the ex ante efficient allocation is implementable by a direct mechanism in which truthful revelation is the strictly service constraint, the truth-telling equilibrium implements the symmetric, ex ante efficient allocation with respect to iterated elimination of strictly dominated strategies.

Bank runs, Financial intermediation

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