Accessible Requires Authentication Published by De Gruyter June 4, 2019

Endogenous Matching and Money with Random Consumption Preferences

Thomas L. Hogan and William J. Luther

Abstract

Current money matching models employ either random matching or endogenous matching processes, both of which oversimplify the problem. We maintain that, although most economic interactions are intentional, some randomness remains. We offer an endogenous matching model of money with random consumption preferences. Our model preserves the intentionality of economic interactions while leaving scope for chance. We identify the conditions for potential monetary and nonmonetary equilibria and compare them to those of other endogenous matching and random matching models.

JEL Classification: C78; E41

Acknowledgements

The authors thank our reviewers, Joshua R. Hendrickson, and session participants at the Association for Private Enterprise Education annual conference for helpful comments and suggestions.

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Published Online: 2019-06-04

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