TY - JOUR
T1 - Money as a medium of exchange in an economy with artificially intelligent agents
AU - Marimon, Ramon
AU - McGrattan, Ellen
AU - Sargent, Thomas J.
PY - 1990/5
Y1 - 1990/5
N2 - We study the exchange economies of Kiyotaki and Wright (1989) in which agents must use a commodity or fiat money as a medium of exchange if trade is to occur. Our agents are artificially intelligent and are modeled as using classifier systems to make decisions. In the assignment of credit within the classifier systems, we introduce some innovations designed to study sequential decision problems in a multi-agent environment. For most economies that we have simulated, trading and consumption patterns converge to a stationary Nash equilibrium even if agents start with random rules. In economies with multiple equilibria, the only equilibrium that emerges in our simulations is the one in which goods with low storage costs play the role of medium of exchange (i.e., the 'fundamental equilibrium' of Kiyotaki and Wright).
AB - We study the exchange economies of Kiyotaki and Wright (1989) in which agents must use a commodity or fiat money as a medium of exchange if trade is to occur. Our agents are artificially intelligent and are modeled as using classifier systems to make decisions. In the assignment of credit within the classifier systems, we introduce some innovations designed to study sequential decision problems in a multi-agent environment. For most economies that we have simulated, trading and consumption patterns converge to a stationary Nash equilibrium even if agents start with random rules. In economies with multiple equilibria, the only equilibrium that emerges in our simulations is the one in which goods with low storage costs play the role of medium of exchange (i.e., the 'fundamental equilibrium' of Kiyotaki and Wright).
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U2 - 10.1016/0165-1889(90)90025-C
DO - 10.1016/0165-1889(90)90025-C
M3 - Article
AN - SCOPUS:0000735601
VL - 14
SP - 329
EP - 373
JO - Journal of Economic Dynamics and Control
JF - Journal of Economic Dynamics and Control
SN - 0165-1889
IS - 2
ER -