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- Title
Endogenously determined price rigidities.
- Authors
Herings, P. Jean-Jacques
- Abstract
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.
- Subjects
PRICES; POLITICAL systems; POLITICAL candidates; ECONOMICS; POLITICAL science
- Publication
Economic Theory, 1997, Vol 9, Issue 3, p471
- ISSN
0938-2259
- Publication type
Article
- DOI
10.1007/BF01213850