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Everyone-a-Banker or the Ideal Credit Acceptance Everyone-a-Banker or the Ideal Credit Acceptance

Author

Listed:
  • Huber, Juergen

    (U of Innsbruck)

  • Shubik, Martin

    (Yale U)

  • Sunder, Shyam

Abstract

Is personal credit issued by participants sufficient to operate an economy efficiently, with no outside or government money? Sorin (1995) constructed a strategic market game to prove that this is possible. We conduct an experimental game in which each agent issues her own IOUs and a costless efficient clearinghouse adjusts the exchange rates among them so the markets always clear. The results suggest that if the information system and clearing are so good as to preclude moral hazard, any form of information asymmetry, or need for trust, the economy operates efficiently at any price level without government money. Conversely, perhaps explanations for prevalence of government money should be sought in either the above mentioned frictions or our unwillingness to experiment with innovation.

Suggested Citation

  • Huber, Juergen & Shubik, Martin & Sunder, Shyam, 2007. "Everyone-a-Banker or the Ideal Credit Acceptance Everyone-a-Banker or the Ideal Credit Acceptance," Working Papers 26, Yale University, Department of Economics.
    • Handle: RePEc:ecl:yaleco:26
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    File URL: http://economics.yale.edu/sites/default/files/files/Working-Papers/wp000/ddp0027.pdf
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    Citations

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    Cited by:

    1. Huber, Juergen & Shubik, Martin & Sunder, Shyam, 2007. "Three Minimal Market Institutions: Theory and Experimental Evidence," Working Papers 27, Yale University, Department of Economics.
    2. Huber, Juergen & Shubik, Martin & Sunder, Shyam, 2010. "Three minimal market institutions with human and algorithmic agents: Theory and experimental evidence," Games and Economic Behavior, Elsevier, vol. 70(2), pages 403-424, November.
    3. Martin Shubik, 2012. "Eminent Paper Series The Present And Future Of Game Theory," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 57(01), pages 1-14.
    4. Martin Shubik, 2011. "The Present and Future of Game Theory," Cowles Foundation Discussion Papers 1808, Cowles Foundation for Research in Economics, Yale University.
    5. Dmitry Levando, 2012. "A Survey Of Strategic Market Games," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 57(194), pages 63-106, July - Se.

    More about this item

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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