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On the Micro-foundations of Money: The Capitol Hill Baby-Sitting Co-op


Hens, Thorsten; Schenk-Hoppé, Klaus Reiner; Vogt, Bodo (2002). On the Micro-foundations of Money: The Capitol Hill Baby-Sitting Co-op. Working paper series / Institute for Empirical Research in Economics No. 108, University of Zurich.

Abstract

We 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.

Abstract

We 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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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Institute for Empirical Research in Economics (former)
Dewey Decimal Classification:330 Economics
Language:English
Date:March 2002
Deposited On:29 Nov 2011 21:26
Last Modified:12 Aug 2017 12:52
Series Name:Working paper series / Institute for Empirical Research in Economics
ISSN:1424-0459
Official URL:http://www.econ.uzh.ch/wp.html

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