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The emergence of money: Computational approaches with fully and boundedly rational agents

Abstract : We discuss the emergence of money in a Kiyotaki and Wright (J Polit Econ 97:927–954, 1989) environment through two computational methodologies. One assumes that agents are fully rational and coordinate on Nash equilibria. The other considers boundedly rational agents whose choices are guided by a classifier system à la Marimon et al. (J Econ Dyn Control 14:329–373, 1990). We apply the two methodologies to study the conditions under which individuals can learn to play speculative strategies—to accept a high-storage-cost good as money. Our analysis suggests that, while in both types of systems money can emerge along a dynamic path, boundedly rational agents make conflicting choices at times, even when the classifier system provides clear information about the likely gains of a trade.
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https://hal.archives-ouvertes.fr/hal-02403894
Contributor : Zakaria Babutsidze Connect in order to contact the contributor
Submitted on : Wednesday, December 11, 2019 - 9:01:19 AM
Last modification on : Saturday, October 8, 2022 - 4:11:03 AM

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Zakaria Babutsidze, Maurizio Iacopetta. The emergence of money: Computational approaches with fully and boundedly rational agents. Computational Economics, 2019, 58, pp.3-26. ⟨10.1007/s10614-019-09887-x⟩. ⟨hal-02403894⟩

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