COWLES FOUNDATION FOR RESEARCH IN
ECONOMICS Box 208281
COWLES FOUNDATION DISCUSSION PAPER NO. 759 "The Many Properties of Money: A Strategic Market Game Analysis" Martin Shubik September 1985 Among the major properties of a money are that it can serve as (1) a numeraire, (2) a
means of exchange, (3) a store of value, and (4) a source of liquidity. Among the lesser
properties are that it should be easy to transport and identify, it should be durable,
easily divisible, hard to counterfeit and easy to store. A possibly desirable property is
that it is an anonymous "bearer instrument," but the price of anonymity is that
it is hard to recover if it is stolen. A personal check which is bank money can be stopped
and is more personal than a $100 bill. The properties of a money are systemic and
strategic and are most naturally formalized by means of strategic market games. Here we
concentrate on the four major properties noted above and include comments on the cost of
liquidity and the role of various assets as near monies. |
