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A NOTE ON “MONEY IS MEMORY“: A COUNTEREXAMPLE

Published online by Cambridge University Press:  20 April 2016

Yu Awaya  and
Hiroki Fukai
Yu Awaya*
Affiliation:
University of Rochester
Hiroki Fukai
Affiliation:
The Pennsylvania State University
*
Address correspondence to: Yu Awaya, University of Rochester, 280 Hutchison Rd., Box 270156, Rochester, NY 14627, USA; e-mail: yuawaya@gmail.com.
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Abstract

A counterexample to the notion that money is memory is provided—one that relies on incomplete information. There exists an implementable allocation for it with money that is not implementable with memory. The result arises because money conveys only a limited amount of information about past actions, which can be beneficial in settings with incomplete information.

Keywords

MoneyIncomplete InformationImperfect Monitoring
Type
Notes
Information
Macroeconomic Dynamics , Volume 21 , Issue 2 , March 2017 , pp. 545 - 553
Copyright
Copyright © Cambridge University Press 2016 

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Footnotes

We are most grateful to Neil Wallace for his continuous guidance and encouragement. We also would like to thank Kalyan Chatterjee, Russell Cooper, Tadashi Sekiguchi, Ruilin Zhou, participants in Cornell/PennState Macro Workshop 2013 Fall, an anonymous referee, an associate editor, and especially Ed Green, for their comments.

References

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