Non-Monetary Exchange Within Firms and Industry / Canice Prendergast, Lars A. Stole.

Format:

Book

Author/Creator:

Prendergast, Canice.

Contributor:

National Bureau of Economic Research.

Stole, Lars A.

Series:

Working Paper Series (National Bureau of Economic Research) no. w5765.

NBER working paper series no. w5765

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1996.

Summary:

This paper considers why non-monetary means of exchange, such as barter and the reciprocation of favors, are chosen by firms despite the usual benefits of monetary transactions. We consider the chosen means of exchange when both monetary and non-monetary exchange mechanisms are available. We illustrate three potential reasons for the emergence of non-monetary trade. First, a willingness to barter may reveal information that cannot be revealed solely through monetary trade. Second, non-monetary trade may constrain the ability of agents to engage in inefficient rent-seeking activities. Finally, non-monetary trade improves the ability of agents to impose trade sanctions on those who act dishonestly. We consider a number of applications of each of these ideas.

Notes:

Print version record

September 1996.