Is personal currency issued by participants sufficient to operate an economy efficiently, with no outside or government money? Sahi and Yao (in J Math Econ, 1989) and Sorin (in J Econ Theory, 1996) constructed a strategic market game to prove that this is possible. We conduct an experimental...

Closed exchange and production-and-exchange economies may have multiple equilibria, a fact that is usually ignored in macroeconomic models. Our basic argument is that default and bankruptcy laws are required to prevent strategic default, and these laws can also serve to provide the conditions...