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Rate-of-Return Dominance and Efficiency in an Experimental Economy

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  • Camera, G.
  • Noussair, C.
  • Tucker, S.

Abstract

One of the main challenges for monetary economics is to explain the use of assets that are dominated in rate-of-return as media of exchange. In this paper, we use experimental methods to study how a fiat money might come to be used in transactions when an identically marketable, dividend-bearing asset, a consol, is also available.

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Bibliographic Info

Paper provided by Purdue University, Department of Economics in its series Purdue University Economics Working Papers with number 1135.

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Length: 34 pages
Date of creation: Aug 2000
Date of revision:
Handle: RePEc:pur:prukra:1135

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Keywords: EXPERIMENTS ; ECONOMICS ; MONEY;

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References

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Citations

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Cited by:
  1. Vernon L. Smith, 2003. "Constructivist and Ecological Rationality in Economics," American Economic Review, American Economic Association, American Economic Association, vol. 93(3), pages 465-508, June.
  2. John Duffy & Daniela Puzzello, 2011. "Gift Exchange versus Monetary Exchange: Theory and Evidence," Working Papers, University of Pittsburgh, Department of Economics 449, University of Pittsburgh, Department of Economics, revised Sep 2013.
  3. Valev, Neven T., 2010. "The hysteresis of currency substitution: Currency risk vs. network externalities," Journal of International Money and Finance, Elsevier, Elsevier, vol. 29(2), pages 224-235, March.
  4. Dror Goldberg, 2012. "The tax-foundation theory of fiat money," Economic Theory, Springer, Springer, vol. 50(2), pages 489-497, June.
  5. Frédéric Koessler & Charles Noussair & Anthony Ziegelmeyer, 2007. "Information Aggregation and Beliefs in Experimental Parimutuel Betting Markets," Papers on Strategic Interaction, Max Planck Institute of Economics, Strategic Interaction Group 2005-12, Max Planck Institute of Economics, Strategic Interaction Group.
  6. John Duffy, 2008. "Macroeconomics: A Survey of Laboratory Research," Working Papers, University of Pittsburgh, Department of Economics 334, University of Pittsburgh, Department of Economics, revised Jun 2014.
  7. Daniela Puzzello & Brit Grosskpof & John Duffy, 2011. "Gift Exchange versus Monetary Exchange: Experimental Evidence," 2011 Meeting Papers, Society for Economic Dynamics 1153, Society for Economic Dynamics.
  8. David Andolfatto, 2005. "On the Coexistence of Money and Bonds," Macroeconomics, EconWPA 0502020, EconWPA.
  9. Deck, Cary A. & McCabe, Kevin A. & Porter, David P., 2006. "Why stable fiat money hyperinflates: Results from an experimental economy," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 61(3), pages 471-486, November.

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