The exchange economy E can be reformulated as a strategic market game. In particular the point of concern here involves the introduction of a speciﬁed amount of credit or ﬁat money to monetize exchange. Dubey and Shubik (1979) and Shubik and Wilson (1977) have studied the possibility of introducing a ﬁxed amount M of money to ﬁnance trade. When one formulates exchange as a game of strategy using any form of credit or ﬁat money where there is any possibility whatsoever that an individual will be unable to pay back that which he has borrowed, the rules of the game require that the procedure to be followed in case of default must be speciﬁed. This is not a mere institutional detail but a logical necessity. It is however reasonable to expect that one might try to design a default penalty suﬀiciently harsh to discourage strategic default.
Shubik, Martin, "The Unique Minimal Cash Flow Competitive Equilibrium" (1986). Cowles Foundation Discussion Papers. 1049.