Money and Limited Enforcement in Multilateral Exchange
Nicola Amendola and
Leo Ferraris ()
No 298, CEIS Research Paper from Tor Vergata University, CEIS
We propose a model in which money performs an essential role in the process of exchange, despite the presence of a multilateral clearing house. Agents are assumed to be anonymous and unable to make binding commitments. The clearing house can detect deviations but it cannot identify the individual deviator, hence, it punishes all traders collectively. The records of past deviations can be kept for a limited amount of time, after which they are wiped out. These features are enough to make room for a record-keeping device, such as money, that strictly improves the functioning of the clearing house.
Keywords: Money; Essentiality; Multilateral trade (search for similar items in EconPapers)
JEL-codes: D50 E40 E42 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2013-11-25, Revised 2013-11-25
New Economics Papers: this item is included in nep-mac and nep-mon
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Journal Article: MONEY AND LIMITED ENFORCEMENT IN MULTILATERAL EXCHANGE (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:rtv:ceisrp:298
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