Intrinsically Worthless Objects as Media of Exchange: Experimental Evidence*
Year: 2002
Type: article
Abstract: This article reports results from an experiment that examines whether an intrinsically worthless, ‘‘token'’ object serves as a medium of exchange in a laboratory implementation of Kiyotaki and Wright's search model of money. The theory admits Nash equilibria in which the token object is or is not used as a medium of exchange. We find that subjects nearly always offer to trade for the token object when such a trade lowers their storage costs. However, subjects frequently refuse to offer to trade the token object for more costly‐to‐store goods when the theory predicts they should make such trades.
Source: International Economic Review
Authors: John Duffy, Jack Ochs
Institutions: University of Pittsburgh, University of California, Irvine
Language: English
Topic: Economic theories and models
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1976038644