Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/104077
Authors: 
Marin, Dalia
Year of Publication: 
2000
Series/Report no.: 
Munich Discussion Paper 2000-12
Abstract: 
The virtual economy argument for Russia suggests that barter allows the parties to pretend that the manufacturing sector is producing value by enabling this sector to sell its output at a higher price than its market value. We confront this prediction with the actual pricing behavior of industrial sectors in the Ukraine in 1997. Based on pricing data of 165 barter deals we find no systematic difference in the pricing behavior in barter across sectors. What appears to matter for the pricing behavior is whether the sector is on the selling or buying end of the barter transaction. We offer an alternative explanation which sees this pricing behavior as a mechanism to deal with the absence of trust and financial discipline in the economy.
Subjects: 
imperfect input and capital markets
the virtual economy
trade credit
trust
contract enforcement
JEL: 
D20
G30
O10
P30
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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