This chapter analyzes the implications of efficient wage–employment bargaining in a closed monetary macroeconomic model of the AS-AD type with a government sector and fiat money. The consumption sector is made up of heterogeneous consumers - shareholders and workers - with endogenous labor...

We consider a model of stochastic evolution under general noisy best response protocols, allowing the probabilities of suboptimal choices to depend on their payoff consequences. Our analysis focuses on behavior in the small noise double limit: we first take the noise level in agents' decisions...