Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Emergence of Money as a Medium of Exchange: An Experimental Study

Emergence of Money as a Medium of Exchange: An Experimental Study Abstract This paper reports findings from an experiment that implements a search-theoretic model of money as a medium of exchange. The question examined is whether subjects learn to adopt the same commodities as media of exchange that the model predicts will be used in equilibrium. We report that subjects have a strong tendency to play “fundamental” rather than “speculative” strategies even in environments where speculative strategies yield higher payoffs. We examine some possible motivations for subjects' behavior and conclude that subjects are mainly motivated by past payoff experience as opposed to the marketability considerations that the theory emphasizes. (JEL D83, E40 ) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Review American Economic Association

Emergence of Money as a Medium of Exchange: An Experimental Study

American Economic Review , Volume 89 (4) – Sep 1, 1999

Loading next page...
 
/lp/american-economic-association/emergence-of-money-as-a-medium-of-exchange-an-experimental-study-4EgO5kH2QF

References

References for this paper are not available at this time. We will be adding them shortly, thank you for your patience.

Publisher
American Economic Association
Copyright
Copyright © 1999 by the American Economic Association
Subject
Articles
ISSN
0002-8282
DOI
10.1257/aer.89.4.847
Publisher site
See Article on Publisher Site

Abstract

Abstract This paper reports findings from an experiment that implements a search-theoretic model of money as a medium of exchange. The question examined is whether subjects learn to adopt the same commodities as media of exchange that the model predicts will be used in equilibrium. We report that subjects have a strong tendency to play “fundamental” rather than “speculative” strategies even in environments where speculative strategies yield higher payoffs. We examine some possible motivations for subjects' behavior and conclude that subjects are mainly motivated by past payoff experience as opposed to the marketability considerations that the theory emphasizes. (JEL D83, E40 )

Journal

American Economic ReviewAmerican Economic Association

Published: Sep 1, 1999

There are no references for this article.