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Simulating a Multiproduct Barter Exchange Economy

Author

Listed:
  • Daniel Levy

    (Bar-Ilan University)

  • Mark Bergen

    (University of Minnesota)

Abstract

We describe a multiproduct barter trading experiment in which students exchange real goods in an open market based on their own personal preference. The experiment is designed for simulating a pure exchange market in order to demonstrate the role of money and its functions in real economies by showing the limitations and inefficiencies of the traditional barter economy. In addition, the simulation is very effective in highlighting some of the key features that an object that serves as money needs to possess in order to function as an efficient medium of exchange, unit of account, and store of value.

Suggested Citation

  • Daniel Levy & Mark Bergen, 2005. "Simulating a Multiproduct Barter Exchange Economy," Experimental 0505002, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpex:0505002
    Note: Type of Document - pdf; pages: 18
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/exp/papers/0505/0505002.pdf
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    Cited by:

    1. Levy, Daniel, 2007. "Price adjustment under the table: Evidence on efficiency-enhancing corruption," European Journal of Political Economy, Elsevier, vol. 23(2), pages 423-447, June.

    More about this item

    Keywords

    Roles of Money; Functions of Money; Barter; Exchange Economy; Medium of Exchange; Store of Value; Unit of Account; Experiment; Efficient and Inefficient Medium of Exchange; Types of Money; Fiat Money; Commodity Money; Features of Money; Homogeneity; Divisibility; Durability; Storability; Portability; Scarcity; Efficiency versus Equity; Information Cost;

    JEL classification:

    • A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System

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