Compensation for quality difference in a search model of money

• 成果类型: Article
• 署名作者: Fong, YF; Szentes, B
• 署名单位: University of Chicago; Northwestern University
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/j.1468-2354.2005.00353.x
• 发表日期: 2005
• 页码: 957-971
• 关键词: private information; Fiat money; MONETARY EXCHANGE; random-variables; continuum; equilibrium; prices; TRADE

摘要

We study an economy in which there is always double coincidence of wants, agents have perfect information about qualities of goods, and there are no transaction costs. The hold-up problem arises because efforts invested in improving quality prior to search may not be compensated in the market. Situations in which barter fails to motivate quality improvement are identified. With money, however, the extra effort in quality improvement will be compensated when high-quality good producers trade with agents holding both the low-quality good and money. Injection of money can induce almost all agents to produce the high-quality good.