Endogenously determined price rigidities (*)
There exists an extensive literature about economies with price rigidities, where some constraints on the set of admissible price systems are exogenously given. In this paper a general equilibrium model extended by a political system is described where the price rigidities are endogenously chosen by political candidates. Sufficient conditions for the existence of a mixed strategy and a pure strategy equilibrium are given. Finally an example is discussed, where in equilibrium both political candidates propose price rigidities excluding the Walrasian equilibrium price system.
Year of publication: |
1997
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Authors: | Herings, P. Jean-Jacques |
Published in: |
Economic Theory. - Springer. - Vol. 9.1997, 3, p. 471-498
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Publisher: |
Springer |
Saved in:
Saved in favorites
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