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A simplistic model of the emergence of money

Alex Lamarche-Perrin, André Orléan and Pablo Jensen ()
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Alex Lamarche-Perrin: Phys-ENS - Laboratoire de Physique de l'ENS Lyon - ENS Lyon - École normale supérieure - Lyon - CNRS - Centre National de la Recherche Scientifique - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon
Pablo Jensen: Phys-ENS - Laboratoire de Physique de l'ENS Lyon - ENS Lyon - École normale supérieure - Lyon - CNRS - Centre National de la Recherche Scientifique - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon

Working Papers from HAL

Abstract: We present a simplistic model of the competition between dierent currencies. Each individual is free to choose the currency that minimizes his transaction costs, which arise whenever his exchanging relations have chosen a dierent 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 dier-ent currencies in the initial state will remain forever in this fractionalized state.

Keywords: money; dynamics; increasing returns (search for similar items in EconPapers)
Date: 2017-06-01
New Economics Papers: this item is included in nep-pay
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01531274
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