6.8. The instability of staggered price-setting. (See Fethke and Policano, 1986, Ball and Cecchetti, 1988, and Ball and D Romer, 1989) Suppose the economy is described as in Problem 6 7, and assume for simplicity that m is a random walk (so m, m + ur, where u is white noise and has a constant variance) Assume that the amount of profits an individual loses over two periods rel ative to always having p, p, is proportional to (pp) + (P+1 P+1) If 

is the expected value of this loss larger for the individ uals who set their prices in odd periods or for the individuals who set their prices in even periods? In light of this, would you expect to see staggered price setting if

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f < and > < 1,