ENDOGENOUS MARKET FORMATION AND MONETARY TRADE: AN EXPERIMENT

• 成果类型: Article
• 署名作者: Camera, Gabriele; Goldberg, Dror; Weiss, Avi
• 署名单位: Chapman University System; Chapman University; University of Bologna; Open University Israel; Bar Ilan University
• 刊物名称: JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION
• ISSN/ISSBN: 1542-4766
• DOI: 10.1093/jeea/jvz020
• 发表日期: 2020
• 页码: 1553-1588
• 关键词: fiat money; strategic uncertainty; exchange; COORDINATION; search; equilibrium

摘要

The theory of money assumes decentralized bilateral exchange and excludes centralized multilateral exchange. However, endogenizing the exchange process is critical for understanding the conditions that support the use of money. We develop a traveling game to study the emergence of decentralized and centralized exchange, theoretically and experimentally. Players located on separate islands can either trade locally, or pay a cost to trade elsewhere, so decentralized and centralized markets can both emerge in equilibrium. The former minimize trade costs through monetary exchange; the latter maximizes overall surplus through nonmonetary exchange. Monetary trade emerges when coordination is problematic, whereas centralized trade emerges otherwise. This shows that to understand the emergence of money it is important to amend standard theory such that the market structure is endogenized.