Money is an experience good: competition and trust in the private provision of money

Pedro Teles and Ramon Marimon
Authors registered in the RePEc Author Service: Juan Pablo Nicolini

Working Papers from Banco de Portugal, Economics and Research Department

Abstract: We study the interplay between competition and trust as efficiency enhancing mechanisms 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 efficiency. 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.

JEL-codes: E40 E50 E58 E60 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-bec, nep-cba, nep-evo, nep-mac, nep-mon and nep-soc
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https://www.bportugal.pt/sites/default/files/anexos/papers/wp201118.pdf

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
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