A simplistic model of the emergence of money
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
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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)
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