Money is an Experience Good: Competition and Trust in the Private Provision of Money

Ramon Marimon, Juan Pablo Nicolini and Pedro Teles

No ECO2011/24, Economics Working Papers from European University Institute

Abstract: We study the interplay between competition and trust as efficiency-enhancing mechanims in the private provision of money. With commitment, trust is automatically achieved and competition ensures efficiency. Without commitment, competition plays no role. Trust does play a role but requires a bound on effciency. Stationary inflation must be non-negative and, therefore, the Friedman rule cannot be achieved. The quality of money can only be observed after its purchasing capacity is realized. In that sense money is an experience good.

Keywords: Currency competition; Trust; Inflation (search for similar items in EconPapers)
JEL-codes: E40 E50 E58 E60 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-mac, nep-mon and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://cadmus.eui.eu/bitstream/handle/1814/17714/ECO_2011_24.pdf?sequence=1 main text

Related works:
Journal Article: Money is an experience good: Competition and trust in the private provision of money (2012)
Working Paper: Money is an experience good: competition and trust in the private provision of money (2012)
Working Paper: Money is an experience good: competition and trust in the private provision of money (2011)
Working Paper: Money is an Experience Good: Competition and Trust in the Private Provision of Money (2009)
Working Paper: Money is an Experience Good: Competition and Trust in the Private Provision of Money (2009)
Working Paper: Money is an Experience Good: Competition and Trust in the Private Provision of Money
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eui:euiwps:eco2011/24

Access Statistics for this paper

More papers in Economics Working Papers from European University Institute Badia Fiesolana, Via dei Roccettini, 9, 50014 San Domenico di Fiesole (FI) Italy. Contact information at EDIRC.
Bibliographic data for series maintained by Cécile Brière ().