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Well, some new religions really do become successful. But your merchants and customers all need to convert, what if they dont wanna?
by banku_brougham 5y ago
Well, some new religions really do become successful. But your merchants and customers all need to convert, what if they dont wanna?
- sparkie 5y agoMerchants will prefer to accept the good money as payment (Thiers' Law) because it can retain value for longer. They will offer discounts for customers paying with the good money. Thus, customers might prefer to pay with the good money (assuming they have a low-friction means to convert their bad money to good money).
- Kbelicius 5y ago> Merchants will prefer to accept the good money as payment (Thiers' Law) because it can retain value for longer. While it is true that merchants prefer to accept good money as payment that in itself isn't Thiers law. Thiers law is about good money displacing bad money when bad money becomes worthless or there are no legal tender laws. > They will offer discounts for customers paying with the good money. > Thus, customers might prefer to pay with the good money (assuming they have a low-friction means to convert their bad money to good money). This is not true. The only way a customer might prefer to pay with good money in this situation, all things being equal, is if the discount for paying with good money is bigger than the value of holding good money compared to bad money. Good money doesn't displace bad money because customers prefer it but because merchants stop accepting bad money.