A strategic market game with seigniorage costs of Fiat money

Dimitrios Tsomocos and Martin Shubik

Economic Theory, 2002, vol. 19, issue 1, 187-201

Abstract: A model that includes the cost of producing money is presented and the nature of the inefficient equilibria in the model are examined. It is suggested that if one acknowledges that transactions are a form of production, which requires the consumption of resources, then the concept of Pareto optimality is inappropriate for assessing efficiency. Instead it becomes necessary to provide an appropriate comparative analysis of alternative transactions mechanisms in the appropriate context.

Keywords: Strategic market games; Seigniorage costs; Inefficiency. (search for similar items in EconPapers)
Date: 2001-09-12
Note: Received: September 5, 2000; revised version: May 3, 2001
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Working Paper: A Strategic Market Game with Seigniorage Costs of Fiat Money (1993)
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