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'As one dies, so dies the other' ? On local complementary currencies as two-sided platforms

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  • Jean-Baptiste Desquilbet

    (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique)

  • Etienne Farvaque

    (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique)

Abstract

Are local complementary currencies doomed? We analyse the conditions underlying the existence of these alternative monetary arrangements from the perspective of the two-sided platform theory. Considering their benefits to depend on the cross-externality generated by the presence of buyers and sellers using the alternative means of payment, we show that the possibility of the sustainability of such arrangements is weak. The result is established in a very general setting and with few restrictions on the parameters. Except in the presence of subsidies, the odds are low for local complementary currencies to survive.

Suggested Citation

  • Jean-Baptiste Desquilbet & Etienne Farvaque, 2022. "'As one dies, so dies the other' ? On local complementary currencies as two-sided platforms," Working Papers halshs-03518592, HAL.
    • Handle: RePEc:hal:wpaper:halshs-03518592
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03518592
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    References listed on IDEAS

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    More about this item

    Keywords

    Community currency; Complementary currency; Local exchange systems; Two-sided platforms; Means of payment JEL Classification: D42; E41; E42; E59; L11;
    All these keywords.

    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E59 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Other
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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