Notice that the strategy of a young person can depend on m, and the strategy of an old person can depend on m and r. On the basis of these choices, suppose a Nash equilibrium is reached under which each young person supplies some amount of labor and ends up with some amount of cash. I will restrict attention to symmetric equilibria, so that in equilibrium each young person ends up with mx dollars. Each young per son also ends up supplying rm, x) units of labor, and this quantity is also the equilibrium consumption of each old person, where the notation is chosen to emphasize that m and x are the only state variables in this model. Different specifications of the trading game will have different implications for this out come function f Now assume that before the play of such a game begins, the money stock m is evenly distributed over the old, that everyone, young and old, knows what it is and that everyone knows how transfers occur the rules of this tra ding game. In these circumstances, changes in m must be neutral units chan ges, so that fis constant with respect to m and can be written f(n, x) fa) for some function f Given this function the average price of goods is just the n/f(x). In competitive trading money stock divided by production, or p is a constant function, so price is proportional to mx, where is known, bu in many other trading games the function f will vary with the value x. In this notation, rationalizing a trade-off of the type described by Hume translate into constructing a game that rationalizes an increasing function One such game(though that equilibrium was not quite symmet described in Lucas(1972). There, the response in output was based on sup pliers' imperfect information about the transfer x. But at this level of abstra tion there are many other non-competitive trading game that have outc