New market game equilibrium leads to stable wealth distribution and prices
The article explores how agents in an economy use fiat money to hedge against fluctuations in commodity endowments. By analyzing individual optimization problems and Markov chains, the researchers found that in a stationary equilibrium, commodity prices remain constant and wealth distribution among agents stays fixed over time. This equilibrium is maintained through simple strategies employed by the agents. Future research may delve into additional aspects like borrowing, lending, production, generations of agents, and bankruptcy.