Coexistence of several currencies in presence of increasing returns to adoption

Alex Lamarche-Perrin, Andr\'e Orl\'ean and Pablo Jensen
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Alex Lamarche-Perrin: Phys-ENS
Andr\'e Orl\'ean: PSE
Pablo Jensen: Phys-ENS

Papers from arXiv.org

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.

Date: 2018-01
New Economics Papers: this item is included in nep-mon and nep-pay
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:1801.04218

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