First published 2 September 2013
The Origin of Money: An Agent-Based Model
Timothy Moran, Markus Brede, Antonella Ianni, Jason Noble
The benefits of money as a medium of exchange are obvious, but the historical origin of money is less clear. An existing economic model of monetary search is reproduced as an agentbased simulation and an evolutionary algorithm is used to model social learning. This approach captures the way in which different equilibria can arise, including solutions in which one or two goods come to be used as money. In the case where monetary goods have identical properties, multiple equilibria can be reached with a dependence on the starting beliefs of agents. In our analysis we also consider the evolutionary dynamics that allow for a small chance of mutations in strategies. In some cases our findings show evolutionary paths by which use of particular monetary goods can collapse.