TY - JOUR
T1 - Money is an experience good
T2 - competition and trust in the private provision of money
AU - Marimon, Ramon
AU - Nicolini, Juan Pablo
AU - Teles, Pedro
PY - 2012/12
Y1 - 2012/12
N2 - The interplay between competition and trust as efficiency-enhancing mechanisms in the private provision of money is studied. With commitment, trust is automatically achieved and competition ensures efficiency. Without commitment, competition plays no role. Trust does play a role but requires a bound on efficiency. Stationary inflation must be non-negative and, therefore, the Friedman rule cannot be achieved. The quality of money can be observed only after its purchasing capacity is realized. In this sense, money is an experience good.
AB - The interplay between competition and trust as efficiency-enhancing mechanisms in the private provision of money is studied. With commitment, trust is automatically achieved and competition ensures efficiency. Without commitment, competition plays no role. Trust does play a role but requires a bound on efficiency. Stationary inflation must be non-negative and, therefore, the Friedman rule cannot be achieved. The quality of money can be observed only after its purchasing capacity is realized. In this sense, money is an experience good.
UR - http://www.scopus.com/inward/record.url?scp=84870437748&partnerID=8YFLogxK
U2 - 10.1016/j.jmoneco.2012.10.006
DO - 10.1016/j.jmoneco.2012.10.006
M3 - Article
AN - SCOPUS:84870437748
SN - 0304-3932
VL - 59
SP - 815
EP - 825
JO - Journal of Monetary Economics
JF - Journal of Monetary Economics
IS - 8
ER -