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arXiv · 1801.04218

Coexistence of several currencies in presence of increasing returns to adoption

Alex Lamarche-Perrin·André Orléan·Pablo Jensen
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Abstract

We present a simplistic model of the competition between different currencies. Each individual is free to choose the currency that minimizes his transaction costs, which arise whenever his exchanging relations have chosen a different currency. We show that competition between currencies does not necessarily converge to the emergence of a single currency. For large systems, we prove that two distinct communities using different currencies in the initial state will remain forever in this fractionalized state.

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Alex Lamarche-Perrin, André Orléan, Pablo Jensen. 2018-01-12. Coexistence of several currencies in presence of increasing returns to adoption. https://doi.org/10.1016/j.physa.2017.12.117

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