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You may have a postmodern version in mind, but the actual Gresham’s law doesn’t involve any hard decisions. It says that when using coins made of precious metal
by tlb 6y ago
You may have a postmodern version in mind, but the actual Gresham’s law doesn’t involve any hard decisions. It says that when using coins made of precious metals, people will always spend the lightest coins they have. A perfectly rational and simple behavior that causes all the circulating coins to be underweight.
- AbrahamParangi 6y agoThis is still the same phenomenon. In your example it is the seller who has to decide to accept (or not accept) your currency and the buyer is incentivized to give the lowest value currency. To use the car salesman analogy, in your example the buyer is selling lemons and the seller is deciding to buy.