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The coincidence of wants (often known as double coincidence of wants) [1] [2] [verification needed] is an economic phenomenon where two parties each hold an item that the other wants, so they exchange these items directly. Within economics, this has often been presented as the foundation of a bartering economy. [3]
These goods were first exchanged by barter. Specialization depended on trade but was hindered by the "double coincidence of wants" which barter requires, i.e., for the exchange to occur, each participant must want what the other has. To complete this hypothetical history, craftsmen would stockpile one particular good, be it salt or metal, that ...
Matching has two main categories. One category is matching with nontransferrable utility (NTU), where match payoffs are nontransferable and stability requires individual rationality and double coincidence of wants. This strand of the literature emerged from the Gale and Shapley (1962) introduction of the stable marriage problem. The second ...
The definition of money says it is money only "in a particular country or socio-economic context". In general, communities only use a single measure of value, which can be identified in the prices of goods listed for sale. There might be multiple media of exchange, which can be observed by what is given to purchase goods ("medium of exchange ...
(This is called "double coincidence of wants".) But this is arguably too simplistic an interpretation of how markets operate in the real world. In any real economy, bartering occurs all the time, even if it is not the main means to acquire goods and services. The volume of countertrade is growing.
In order to be a medium of exchange, money must hold its value over time; that is, it must be a store of value. If money could not be stored for some period of time and still remain valuable in exchange, it would not solve the double coincidence of wants problem and therefore would not be adopted as a medium of exchange.
In economics, a want is something that is desired. It is said that every person has unlimited wants, but limited resources (economics is based on the assumption that only limited resources are available to us). Thus, people cannot have everything they want and must look for the most affordable alternatives. Wants are often distinguished from needs.
The seller primarily wants money for his product and is not really concerned with its consumption or use (other than from the point of view of making sales); the consumer wants to use or consume the product, and money is the means to acquire it from any convenient source.