Social Norms and Monetary Trading

Guilherme Carmona

Macroeconomics from University Library of Munich, Germany

Abstract: Random matching models have been used in Monetary Economics to argue that money can increase the well being of all agents in the economy. If the model features a finite number of agents it will be shown that there is an equilibrium, analogous to the contagious equilibria described in Kandori (1992), that Pareto dominates the monetary one. However it will be shown also that monetaty equilibria have two important advantages: firstly, they are more plausible in large economies in the sense that the lowest discount factor compatible with monetary equilibria doesn't depend on the population size, which is not the case with contagious equilibria; secondly, it is more stable to finite deviations in the following sense: no matter what the past has been, future play of the equilibrium strategies will give players the same payoff as if the equilibrium strategies were always followed.

Keywords: Monetary trading; social norms (search for similar items in EconPapers)
JEL-codes: E40 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2004-02-27
New Economics Papers: this item is included in nep-mac
Note: Type of Document - pdf; prepared on winxp; to print on general; pages: 20; figures: 0. none
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://econwpa.ub.uni-muenchen.de/econ-wp/mac/papers/0402/0402030.pdf (application/pdf)

Related works:
Working Paper: Social norms and monetary trading (2002)
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:wpa:wuwpma:0402030

Access Statistics for this paper

More papers in Macroeconomics from University Library of Munich, Germany
Bibliographic data for series maintained by EconWPA ( this e-mail address is bad, please contact ).