A formal analysis of the beginnings of coinage in antiquity

This is the first attempt to model the beginnings of coinage in Ionia, Lydia and Greece before the fifth century B.C. Apart from bringing together all of the influences on the essential choices facing the government and the private sector within a coherent whole, the effort yields one important result. Contrary to popular assumption, early coinage was not highly profitable. The Lydian government and the Ionian and Greek city-states provided an extreme-ly wide array of denominations of coins in a single precious metal at considerable cost. Their willingness to bear this cost must have reflected a political strategy of promoting coinage. Such a political strategy would also be easy to explain. In addition, the paper examines the fact that the early Ionian and Lydian coins were composed of electrum, a subject of consider-able interest and importance in itself.