@article{Verification:2481,
      recid = {2481},
      author = {Fung, Ben and Shao, Enchuan},
      title = {Counterfeit Quality and Verification in a Monetary  Exchange},
      address = {2011},
      pages = {1 online resource (iii, 34 pages)},
      abstract = {Recent studies on counterfeiting in a monetary search  framework show that counterfeiting does not occur in a  monetary equilibrium. These findings are inconsistent with  the observation that counterfeiting of bank notes has been  a serious problem in some countries. In this paper, we show  that counterfeiting can exist as an equilibrium outcome in  a model in which money is not perfectly recognizable and  thus can be counterfeited. A competitive search environment  is employed in which sellers post offers and buyers direct  their search based on posted offers. When sellers are  uninformed about the quality of the money, their offers are  pooling and thus buyers can extract rents by using  counterfeit money. In this case, counterfeit notes can  coexist with genuine notes under certain conditions. We  also explicitly model the interaction between sellers'  verification decisions and counterfeiters' choices of  counterfeit quality. This allows us to better understand  how policies can affect counterfeiting.},
      url = {http://www.oar-rao.bank-banque-canada.ca/record/2481},
      doi = {https://doi.org/10.34989/swp-2011-4},
}