# Coexistence of several currencies in presence of increasing returns to adoption

*Alex Lamarche-Perrin*,
*André Orléan* and
*Pablo Jensen*

*Physica A: Statistical Mechanics and its Applications*, 2018, vol. 496, issue C, 612-619

**Abstract:**
We present a simplistic model of the competition between different currencies. Each individual is free to choose the currency that minimizes his transaction costs, which arise whenever his exchanging relations have chosen a different currency. We show that competition between currencies does not necessarily converge to the emergence of a single currency. For large systems, we prove that two distinct communities using different currencies in the initial state will remain forever in this fractionalized state.

**Keywords:** Currency; Multiple equilibria; Dynamics; Random graphs; Communities (search for similar items in EconPapers)

**Date:** 2018

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**Persistent link:** https://EconPapers.repec.org/RePEc:eee:phsmap:v:496:y:2018:i:c:p:612-619

**DOI:** 10.1016/j.physa.2017.12.117

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