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Full-Text Articles in Other Economics
Money Is More Than Memory, Maria Bigoni, Gabriele Camera, Marco Casari
Money Is More Than Memory, Maria Bigoni, Gabriele Camera, Marco Casari
ESI Working Papers
Impersonal exchange is the hallmark of an advanced society and money is one key institution that supports it. Economic theory regards money as a crude arrangement for monitoring counterparts’ past conduct. If so, then a public record of past actions—or memory—should supersede the function performed by money. This intriguing theoretical postulate remains untested. In an experiment, we show that the suggested functional equivalence between money and memory does not translate into an empirical equivalence: money removed the incentives to free ride, while memory did not. Monetary systems performed a richer set of functions than just revealing past behaviors.
Testing The Boundaries Of The Double Auction: The Effects Of Complete Information And Market Power, Erik O. Kimbrough
Testing The Boundaries Of The Double Auction: The Effects Of Complete Information And Market Power, Erik O. Kimbrough
Economics Faculty Articles and Research
We report boundary experiments testing the robustness of price convergence in double auction markets for non-durable goods in which there is extreme earnings inequality at the competitive equilibrium (CE). Following up on a conjecture by Smith (1976a), we test whether the well-known equilibrating power of the double auction institution is robust to the presence of complete information about traders’ values and costs and the presence of symmetric market power. We find that complete information is insufficient to impede convergence to CE prices; however, introducing market power consistently causes prices to deviate from the CE, whether or not subjects possess complete …