Date of Completion


Embargo Period



Money; Search Theory; Macroeconomics; Monetary Economics

Major Advisor

Professor Dennis Heffley

Associate Advisor

Professor Richard Suen

Associate Advisor

Professor Enrico Zaninotto

Field of Study



Doctor of Philosophy

Open Access

Open Access


Chapter 1 shows that total anonymity in matching is not a necessary condition to give rise to the use of money, contrary to the existing literature, which finds that total anonymity is required. The first paper presents a simple model of direct money search in a decentralized environment. This paper presents three interesting findings: (i) partial anonymity is sufficient for money to be useful, (ii) commodity money does not exist in symmetric direct money search at steady state, (iii) bartering and commodity money can co-exist in the asymmetric case. The introduction of fiat money drives out bartering and commodity money, consistent with previous studies.

The second chapter presents two thought-provoking results on money search models. For random money search models, it has been taken for granted that monetary equilibrium unquestionably holds if the number types of good is greater than three. This chapter reports that monetary equilibrium in random money search models fail to exist when the number of types of goods is signficantly greater than three. An increasing number of types of goods reduces the matching probability and expected utility, ultimately approaching zero as the number of types of goods approaches infinity. A quasi-direct search model is presented as a solution for this problem. This leads to another more thought-provoking result: a connection between two major macroeconomics models, namely cash-in-advance and money search models.

In Chapter 3, a search-theoretic model is used to show that money is a necessary instrument to clear the market. In decentralized markets with imperfect information, money assumes the role of a perfectly informed Walrasian auctioneer. This chapter presents a novel framework that utilizes money to clear the market in a decentralized environment, in contrast to Lagos and Wright (2005), where a centralized price mechanism clears the market. Without the use of money, markets with imperfect information are almost impossible to clear. Markets can exist without money, and the market is not a substitute for money.