On the Micro-foundations of Money: The Capitol Hill Baby-Sitting Co-op
AbstractWe suggest a new micro-foundation of money in which markets are well-organized but consumers' preferences are stochastic. In this model, we solve for stationary equilibria and show that there is an optimum quantity of money. The rational solution of our model is compared with actual behavior in a laboratory experiment. It turns out that the experiment gives support to our theoretical results.
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Bibliographic InfoPaper provided by Institute for Empirical Research in Economics - University of Zurich in its series IEW - Working Papers with number 108.
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micro foundations of money; optimal quantity of money;
Other versions of this item:
- Hens, Thorsten & Schenk-Hoppe, Klaus Reiner & Vogt, Bodo, 2003. "On the micro-foundations of money : the Capitol Hill Baby-Sitting Co-op," HWWA Discussion Papers 255, Hamburg Institute of International Economics (HWWA).
- Thorsten Hens & Klaus Reiner Schenk-Hoppé & Bodo Vogt, 2003. "On the Micro-foundations of Money: The Capitol Hill Baby-Sitting Co-op," Discussion Papers 03-35, University of Copenhagen. Department of Economics.
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
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