Commodity money with frequent search

Ezra Oberfield, Nicholas Trachter

Research output: Contribution to journalArticlepeer-review

10 Scopus citations


A prominent feature of the Kiyotaki-Wright model of commodity money is multiplicity of dynamic equilibria. We show that the extent of multiplicity hinges on the frequency of search. Holding fixed the average number of meetings over time, we vary search frequency by altering the interval between search opportunities. To isolate the role of search frequency, we focus on symmetric equilibria in a symmetric environment. For each frequency we characterize the entire set of payoffs, strategies, and dynamic paths consistent with equilibrium. Indexed by these features, as search frequency increases the set of equilibria converges uniformly to a unique limiting equilibrium.

Original languageEnglish (US)
Pages (from-to)2332-2356
Number of pages25
JournalJournal of Economic Theory
Issue number6
StatePublished - Nov 2012
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics


  • Commodity money
  • Multiple equilibria
  • Search
  • Sunspots


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