In modern economies, most money takes the form of inside money; deposits created by commercial banks to fund credit extension. Because is used as a payment instrument, doubts about risks associated with extension can affect aggregate outcomes. This paper constructs and analyzes model risky extension, creation, monetary exchange. When sufficiently risky, positive probability bank default arises ...

Fischlin’s transformation is an alternative to the standard Fiat-Shamir transform to turn a certain class of public key identification schemes into digital signatures (in the random oracle model). We show that signatures obtained via Fischlin’s transformation are existentially unforgeable even in case the adversary is allowed to get arbitrary (yet bounded) information on the entire state of the...

Starting from the symmetric group Sn , we construct two fiat 2-categories. One of them can be viewed as the fiat “extension” of the natural 2-category associated with the symmetric inverse semigroup (considered as an ordered semigroup with respect to the natural order). This 2-category provides a fiat categorification for the integral semigroup algebra of the symmetric inverse semigroup. The ot...

This paper offers a classification of credit markets in transition economies. It describes a continuum of systems by identifying its polar cases: countries where the entire financial system still relies on outside money, mostly republics of the former Soviet Union; and those where a more decentralized intermediation system is developing (Central/Eastern Europe). We believe that different outcom...

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 for uniqueness. In this paper, we report experimental evidence on the effectiveness of this approach to...

An \electronic coin scheme" as deened by Chaum, Fiat, and Naor 5] is a collection of protocols to achieve untraceable, unforgeable coins with ooine purchasing; this is the minimum set of properties to make electronic money useful. We give a new electronic coin scheme that is simple and practical. Withdrawal requires only two rounds of interaction, while purchase and deposit are non-interactive;...

We investigate the robustness of the backward-induction outcome, in binaryaction extensive-form games, to the introduction of small mistakes in reasoning. Specifically, when a player contemplates the best action at a future decision node, she assigns some small probability to the event that other players may reach a different conclusion when they carry out the same analysis. We show that, in a ...