Unit Of Money Research Articles

Mediation: incomplete information bargaining with filtered communication

We analyze a continuous-time bilateral double auction in the presence of two-sided incomplete information and a smallest money unit. A distinguishing feature of our model is that intermediate concessions are not observable by the adversary: they are only communicated to a passive auctioneer. An alternative interpretation is that of mediated bargaining. Perfect Bayesian Equilibria are characterized. We show that an equilibrium using only the extreme agreements always exists and display the necessary and sufficient condition for the existence of equilibra which yield intermediate agreements. For the symmetric case with uniform-type distribution we numerically calculate the equilibria. We find that the equilibrium which does not use compromise agreements is the least efficient, however the social welfare of the rest of the equilibria is decreasing in the number of compromise agreements used.

On the Friedman Rule in Search Models with Divisible Money

This paper studies the validity of the Friedman rule in a search model with divisible money and divisible goods in which the terms of trades are determined endogenously. We show that ex post bargaining generates a holdup problem similar to the one emphasized in the labor-market literature. Buyers cannot obtain the full return that an additional unit of money provides to the match, which makes the purchasing power of money inefficiently low in equilibrium. Consequently, even though the Friedman rule maximizes the purchasing power of money, it fails to generate the first-best allocation of resources unless buyers have all the bargaining power.

Comment on "Search, Money, and Capital: A Neoclassical Dichotomy"

Before giving my general comments on the paper, I think that it would be useful to describe the evolution of monetary search models for those who have not followed recent developments in the literature. In this way, one has a better sense of the contribution made by Aruoba and Wright (2003, this issue of JMCB). Most people are familiar with the basic monetary search model developed by Kiyotaki and Wright (1989, 1993), and for many this may be the extent of their knowledge of money search models. In this first generation of models, goods and money are indivisible and agents can only hold one unit of goods or money. The key contribution of the models was to carefully describe the decentralized trading environment that gives rise to a double coincidence of wants problem and to endogenize the decision to accept money as payment for goods and services. In all search models, assumptions regarding anonymity of trading histories and imperfect record keeping mean that credit is not feasible, thus money is essential for trade, i.e., better allocations can be achieved through the use of money than without it. While analyzing the decision to accept money as a medium of exchange does not hinge on indivisibilities or inventory restrictions, other questions such as how

Euro Illusion: Psychological Insights into Price Evaluations with a Unitary Currency

The Euro illusion is a phenomenon related to the money illusion whereby people are biased toward the nominal representation of the Euro (the numbers printed on notes and coins) when evaluating prices in the new currency. In Study 1 the Euro illusion was demonstrated in telephone interviews of a Swedish population-based sample. However, no Euro illusion was found for British students in Study 2. An additional two studies employing student samples demonstrated the Euro illusion for fictitious unknown currencies in that prices of goods or services were evaluated as less expensive when the money unit was larger. An exception, however, was that prices were evaluated as more expensive when the money unit was very small (like the Italian Lira). Furthermore, the illusion was weaker or absent for low-price essential goods or services or for an induced negative attitude toward the currency change.

Generalized search-theoretic models of monetary exchange

Virtually all simple search models of money assume agents with money cannot produce, and so everyone has either 0 or 1 units of money in steady state. We alternatively assume agents can always produce, and simply restrict money inventories to 0 or 1. This seems better for many issues; for example, in the standard model it is difficult to interpret increases in the money supply, because increasing the fraction of agents holding money decreases the economy's productive capacity. Our model avoids these problems and thus delivers more natural, and simpler, implications in many contexts. We compare results on existence, multiplicity, and welfare across models.

The Perils of Base Money

Insecure linkage of ordinary money to fractional reserves of a distinct base money can sometimes endanger the smooth working of modern monetary systems. This danger applies most obviously to the analogous insecure pegging of domestic to foreign currency. Worry would better focus, however, not on the size of reserve ratios but on the very existence of something distinct to which ordinary money is linked. In the modern world money is a device for monitoring transactions, keeping records, calculating economic bene- fits and costs, and accomplishing multilateral clearing. Money enables people conveniently to use the entitlements acquired by delivering goods and services and securities to some trading partners to obtain others of these from other trading partners. The tickets and memoranda employed in these operations need not take the form of little disks of precious metal or even of certificates convertible into them or some other kind of ultimate base money. It would be economically advantageous and feasible to make all money "inside money" (in the sense of Gurley and Shaw), with the value of the money unit determined and maintained otherwise than through convertibility into a distinct base money, which would have been abolished.

Honest Abe and Uncle Tom

I. Honest Abe and Uncle TomOver the course of many decades, historians have seen it as their duty to discover the fundamental causes of the Civil War: economic, political, and social. Their pursuit has turned up the political economies of slavery and freedom that ulti­mately would have pulled the American Union apart, peacefully or by force of arms (see Boritt; Collins; Freehling; Levine; McPherson; Niven; Perman; Reid). On the metaphorical level, by contrast, Honest Abe and Uncle Tom—incommensu­rate, but evocative figures—embody the causes of the Civil War. Monuments to Lincoln circulate on a daily basis, as units of money as common as pennies and five-dollar bills. After flourishing for three-quarters of a century, Uncle Tom’s popularity lapsed in the late twentieth century, as African Americans gained cul­tural clout and reinterpreted Tom’s meaning. With Black Power, the figure of Uncle Tom came to stand for treason to the (Negro) race rather than for faithful black Christian virtues, at least for the most part.

Perturbed Adaptive Dynamics in Coalition Form Games

Players adaptively learn how to bargain. A characteristic function describes the available surplus. The underlying bargaining game extends the Nash demand game by allowing subcoalitions to reach an agreement. Players' demands must be multiples of a money unit. We show that stochastically stable allocations (SSA) (i.e., allocations that are most stable to unlikely errors) are a subset of the core. Uniqueness does not obtain even when the money unit becomes arbitrarily small. Nonetheless, every SSA is related to the allocation that maximizes the product of players' utilities over the core; i.e., constrained egalitarian solution for TU-games. Journal of Economic Literature Classification Numbers: C71, C72, C78.

PROFILE: Levying of Ecoenvironmental Compensation Fees in China: An Analysis and Proposals.

/ The levying of ecoenvironmental compensation fees on China's resource exploitation and construction activities, which can cause ecological damage, has been proposed as one effective means to help better manage China's present ecological and environmental problems. Such a fee, however, has not been adopted on a national scale, although small-scale experiments are underway. Using the experience of developed countries as a guide, a policy reform to institute ecoenvironmental compensation fees would require wide-ranging studies and analyses. These would have to include both theoretical and practical investigations on subjects including, but not limited to, methods for setting fees, managing their implementation, and the full range of their impacts (environmental, economic, and social). This article identifies guidelines for the principles and objectives to cover the proposed levy as well as proposals for fee collection and the subsequent these levies.In addition to estimating the total amount of the ecoenvironmental levies, the article analyzes the fee's quantitative effects on the government's major price indexes. Assuming fee collection started in calendar year 1998, total revenues collected by the end of the year 2000 are estimated to range from 6.68 billion Renminbi (RMB, unit of money used in China; 1990's comparative value, the same thereafter), 12.6 billion RMB, to 18.6 billion RMB, depending on the fee rate in question. The revenue collected in this way would, if used to finance environmental reclamation projects, greatly improve important parts of China's endangered environment. Moreover, our calculations indicate that fee collection would likely not lead to significant price fluctuations.KEY WORDS: Ecoenvironmental compensation fee; Levy; Chinahttp://link.springer-ny.com/link/service/journals/00267/bibs/24n3p353.html

The Reeded Edge and the Phillips Curve: Money Neutrality, Common Knowledge, and Subjective Beliefs

I present a simple two-person auction model in which a seller and a buyer make bids in terms of money; however, the value of a unit of money is uncertain. I show: (1) a monetary revaluation has purely nominal effects if and only if it is common knowledge; (2) if seller and buyer have identical beliefs, making the value of money common knowledge maximizes total gains from trade; (3) if seller and buyer are equally well informed and have identical beliefs, then monetary revaluations have no net effect; (4) when the seller knows the value of money but the buyer does not, the expected utilities of both seller and buyer are proportional to 1/(1+σ2), where σ is the standard deviation of the value of money expressed as a fraction of the mean; and (5) when beliefs are subjective, monetary policy can improve total gains from trade, as in Friedman's explanation of the Phillips curve, and an optimal level of inflation can be determined. Journal of Economic Literature Classification Numbers: C78, E52.

Alternating-offer bargaining and common knowledge of rationality

This paper reconsiders Rubinstein's alternating-offer bargaining game with complete information. We define rationalizability and trembling- hand rationalizability (THR) for multi-stage games with observed actions. We show that rationalizability does not exclude perpetual disagreement or delay, but that THR implies a unique solution. Moreover, this unique solution is the unique subgame perfect equilibrium (SPE). Also, we reconsider an extension of Rubinstein's game where a smallest money unit is introduced: THR rules out the non-uniqueness of SPE in some particular case. Finally, we investigate the assumption of boundedly rational players. Perpetual disagreement is excluded, but not delay. Furthermore, we cannot use the asymmetric Nash bargaining solution as an approximation of the alternating-offer bargaining model once the players are boundedly rational ones.

Ambulatory surgery practice in the United Kingdom

I N 1909 THE FIRST report of ambulatory surgery appeared in the British Medical Journal. James Nicoll from the Glasgow Royal Hospital for Sick Children recorded the success of nearly 9,000 pediatric day-case operations, to the acclaim of his peersJ Despite this early start ambulatory surgery was slow to develop in the United Kingdom (UK) until the 1970s when self-contained day-surgery units began to appear, run by enthusias tsy and day surgery gradually gained limited acceptance. However, political and financial factors have radically affected ambulatory surgical practice in the UK since 1990. The vast majority of health care in the UK is publicly funded by the National Health Service (NHS). Attempts to contain rising health care costs coupled with changes in NHS organization have highlighted the financial savings to be made by shifting inpatient surgery to ambulatory surgery. Influential reports from the Audit Commission in 19904 and the Value for Money Unit, NHS Management Executive in 19915 outlined the benefits of ambulatory surgery, including those to the patient. They also identified the perceived and hidden barriers to the expansion of ambulatory surgery as lack of Day Surgery Units (DSUs); poor use, management, and organization of existing facilities; clinicians' preference for more traditional approaches; and inadequate financial and performance information. Some of these barriers have been influenced by recent changes in the NHS. Reorganization in 1990 created an internal market, where District Health Authorities (DHAs) became the purchasers of health care for their patients rather than a provider of funding for the hospitals within their areas. General practitioners could choose to con-

A parimutuel system with two horses and a continuum of bettors

In this paper we study a model of a parimutuel system described as a horse race with two horses and many bettors. Each bettor predicts which horse will win and the raceholder maximizes his revenue-taking from all bets. After an announcement of raceholder's revenue rate for subtracting all betting money, all bettors simultaneously decide their behaviors among three strategies, betting one unit of money on either of horses or withdrawing. The game at second stage which is main interests of our study is a game in normal forms with a continuum of players. We show that there exists an equilibrium in which sets of bettors betting on two horses are not null sets, if the rate of raceholder's revenue is not large. The equilibrium is always regular in the sense that any bettors whose probabilities for win of a horse is larger than someones' betting on the horse must bet on the horse. The equilibrium is determined up to equivalence for null sets, when any bettor's prediction is different from the other's one. Some numerical examples are shown.

Risk management is project management for adults

Too often in the software industry, organizations approach project management in the same way a desperate gambler approaches the tables at Las Vegas or Monaco-with only one thought in mind: roll the dice. In a dice-tossing project, there is nothing you can do to improve your odds. Of course, that is not true for your software projects, but nothing you can do will make your risks go away completely. You can ignore them or you can deal with them explicitly. If you ignore your project's risks, all your other efforts will be for naught. Your project's success is based on opportunity and benefit, on cost and risk. Opportunity and benefit address the value of the delivered software. Cost and risk address the minimum and variable costs-in units of money, time and effort-that are necessary to deliver that product. Any form of risk management is better than none. If you have project management responsibilities, who should be dealing with the inherent risks of your project if not you?.

The Game of Dreidel Made Fair

(1996). The Game of Dreidel Made Fair. The College Mathematics Journal: Vol. 27, No. 4, pp. 278-281.

The Value for Money Unit study and the district nursing service

An emotive issue in nursing literature is the Value for Money Unit’s study ‘The Nursing Skill-Mix in the District Nursing Service’ (NHS Executive 1992). Challenged by a variety of respondents, the study is strongly denounced for its conclusions that higher-grade nurses should utilise their roles as managers of care, leaving lower grade nurses to deliver hands-on care. This paper explores the implications of the study’s conclusions, and considers the contribution nursing could make to the debate about changing professional boundaries.

96/02311 Lending terms, debt concessions, and developing countries' resource extraction

Abstract We study the relationship between natural resources extraction, borrowing, and debt for a developing country that possesses a natural resource, in a two-period framework, and study how an outside ‘donor’ may affect the rate of extraction of the resource, through different types of policies. With no donor intervention the resource is always fully extracted over the two periods. unconditional debt forgiveness and interest rate subsidies have weak effects on the extraction rate, and may never induce the country to save the resource permanently. Conditional mechanisms have much greater effetts, and may in many cases induce the country to save the resource beyond period 2. Generally interest rate subsidies are more powerful than pure debt forgiveness, by inducing more extraction postponement or permanent saving of the resource per unit of money spent by the donor.

Lending terms, debt concessions, and developing countries' resource extraction

We study the relationship between natural resources extraction, borrowing, and debt for a developing country that possesses a natural resource, in a two-period framework, and study how an outside ‘donor’ may affect the rate of extraction of the resource, through different types of policies. With no donor intervention the resource is always fully extracted over the two periods. unconditional debt forgiveness and interest rate subsidies have weak effects on the extraction rate, and may never induce the country to save the resource permanently. Conditional mechanisms have much greater effetts, and may in many cases induce the country to save the resource beyond period 2. Generally interest rate subsidies are more powerful than pure debt forgiveness, by inducing more extraction postponement or permanent saving of the resource per unit of money spent by the donor.

A model of a general parimutuel system: Characterizations and equilibrium selection

We formulate a model of a parimutuel system which considers a horse race with two horses. In our model, the raceholder offers a rate of his total betting revenue in the first stage. In the second stage each bettor simultaneously decides whether he bets one unit of money on one horse or he withdraws, according to his win predictions for each horse. We assume that all bettor's predictions are different and are common knowledge. We define some types of equilibria in the second stage game and give necessary and sufficient conditions for their existence. One equilibrium is a selected as a solution for the second stage game. We also define a solution for the whole game by using this result. Finally, we analyze the relation between the solution and variance for the bettor predictions.

Stationary solution to the overlapping generations model of fiat money: Experimental evidence

Overlapping generations model of fiat money yields an infinity of competitive equilibrium solutions, only one of which is stationary. Economies reported in this paper involved a sequence of overlapping generations of three or four individuals; each individual lived for two periods. In their young age individuals were endowed with “chips” that could be traded for fiat money with the individuals of the old generation. In their old age, individuals could exchange their units of fiat money for the consumption good. Results of the experiments exhibit some support for the stationary solution. The results are robust to two designs of exchange institutions (double oral auction and supply schedule auction) and to two different endogenous ways of converting money into “chips” at the end of the game (average price prevailing during the last period the game is actually played and the average price forecast made during the last period the game is actually played).