A backwardly solvable search equilibrium model

Torn Hokari, Shigeru Makioka, Masayuki Yao

Research output: Contribution to journalArticlepeer-review


So-called "search equilibrium models" typically have multiple equilibria. In almost all studies on these models, only steady states are considered mainly because it is difficult to find non-stationary equilibria. This difficulty does not disappear even if we consider finite-horizon versions of these models. In this note, we propose an approach that might be useful to study non-stationary equilibria in these models. In particular, we consider a discrete-time and finitehorizon version of Diamond's (1982. JPE) model and show how to solve it backwardly. As an illustration, we compute a non-stationary equilibrium of a specific example, which exhibits a three-period cycle.

Original languageEnglish
Pages (from-to)234-246
Number of pages13
JournalEconomics Bulletin
Issue number1
Publication statusPublished - 2013 Aug 30

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)


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