Buyers, sellers and middlemen: variations in search theory

We study bilateral exchange, both direct trade and indirect trade that happens through chains of intermediaries or middlemen. We develop a model of this activity and present applications. This illustrates how, and how many, intermediaries get involved, and how the terms of trade are determined. Bargaining with intermediaries depends on how they bargain with downstream intermediaries, leading to interesting holdup problems. We discuss the roles of buyers and sellers in bilateral exchange, and how to interpret prices. We develop a particular bargaining solution and relate it to other solutions. We also illustrate how bubbles can emerge in the value of inventories.

Dynamic Existence

I am an individual. Nothing and nobody else occupies my standpoint. Otherwise, he would be I. Thus, all what I perceive is individual, perspective of an individual, part of me. The computer screen should be a part of me

Quantum Gravity and Taoist Cosmology: Exploring the Ancient Origins of Phenomenological String Theory

In the author’s previous contribution to this journal (Rosen 2015), a phenomenological string theory was proposed based on qualitative topology and hypercomplex numbers. The current paper takes this further by delving into the ancient Chinese origin of phenomenological string theory. First, we discover a connection between the Klein bottle, which is crucial to the theory, and the Ho-t’u, a Chinese number archetype central to Taoist cosmology. The two structures are seen to mirror each other in expressing the psychophysical (phenomenological) action pattern at the heart of microphysics. But tackling the question of quantum gravity requires that a whole family of topological dimensions be brought into play. What we find in engaging with these structures is a closely related family of Taoist forebears that, in concert with their successors, provide a blueprint for cosmic evolution. Whereas conventional string theory accounts for the generation of nature’s fundamental forces via a notion of symmetry breaking that is essentially static and thus unable to explain cosmogony successfully, phenomenological/Taoist string theory entails the dialectical interplay of symmetry and asymmetry inherent in the principle of synsymmetry. This dynamic concept of cosmic change is elaborated on in the three concluding sections of the paper. Here, a detailed analysis of cosmogony is offered, first in terms of the theory of dimensional development and its Taoist (yin-yang) counterpart, then in terms of the evolution of the elemental force particles through cycles of expansion and contraction in a spiraling universe. The paper closes by considering the role of the analyst per se in the further evolution of the cosmos

General preferences for consumption goods in the random matching model of commodity money

This paper generalizes the original random matching model of money by Kiyotaki and Wright (1989) (KW) in two aspects: first, the economy is characterized by an arbitrary distribution of agents who specialize in producing a particular consumption good; and second, these agents have preferences such that they want to consume any good with some probability. The results depend crucially on the size of the fraction of producers of each good and the probability with which different agents want to consume each good. KW and other related models are shown to be parameterizations of this more general one.Commodity money, random matching, general preferences

A Microfoundation of Monetary Economics

In this lecture, I explain what the microfoundations of money are about and why they are necessary for monetary economics. Then, I review recent developments of a particular microfoundation of money, commonly known as the search theory of money. Finally, I outline some unresolved issues.Money; Search; Microfoundation.

A Dynamic Recontracting Process for Multiple-Type Housing Markets

We consider multiple-type housing markets. To capture the dynamic aspect of trade in such markets, we study a dynamic recontracting process similar to the one introduced by Serrano and Volij (2008). First, we analyze the set of recurrent classes of this process as a (non-empty) solution concept. We show that each core allocation always constitutes a singleton recurrent class and provide examples of non-singleton recurrent classes consisting of blocking-cycles of individually rational allocations. For multiple-type housing markets stochastic stability never serves as a selection device among recurrent classes. Next, we propose a method to compute the limit invariant distribution of the dynamic recontracting process. Furthermore, we discuss how the limit invariant distribution is inuenced by the relative coalitional stability and accessibility of the different stochastically stable allocations. We illustrate our finndings with several examples. In particular, we demonstrate that some core allocations are less likely to be final allocations of the dynamic process than cycles composed of non-core allocations.core; indivisible goods; limit invariant distribution; stochastic stability