Simulating a Multi-Product Barter Exchange Economy
Posted: 25 Feb 2005
We describe a multiproduct barter trading experiment in which students exchange real goods in an open market based on their own preferences. The experiment is designed for simulating a pure exchange market in order to demonstrate the role of money and its functions in real economies by showing the limitations and inefficiencies of the traditional barter economy. In addition, the simulation is very effective in highlighting some of the key feature that an object that serves as money needs to possess in order to function as an efficient medium of exchange, unit of account, and store of value.
Keywords: Barter, exchange economy, market simulation, role of money, functions of money, medium of exchange, unit of account, store of value
JEL Classification: C91, C93, E40, E50
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