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I have recently been playing the game of fallout 4 and I was struck by an interesting spec of the game.

People in the nuclear post-apocalyptic world use bottle caps as barter money.

Inquiring a little, it is said that it has a certain logic to use them, since they resist more or less well the inclemencies of the climate.

They are difficult to duplicate without heavy machinery, which is scarce in the post-nuclear world.

The banks of the world are supposed to base their value on purified water and that in a certain way, if you came to a bank with 100 bottle caps you could come out with a bucket of water.

(I do not know if this means that the banks function at the same time as exchange houses and water purification and distribution facilities)

All this sounds good and in a way with some logic, but reading this only left me more doubts than answers.

How would inflation work in such an economic environment?

How can people buy expensive objects like houses or maybe vehicles, (they cost at least 10000)?

How would a bank know if another has launched a new version of purple coin that is worth more than any other single bottle cap?

If a new bottle cap of unique color appears, how to corroborate that a bank in another village supports its value? (that is, that is not false).

(Sorry about my tags I could not find some tags for a "what if" scenarios).

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  • $\begingroup$ The first logistic implication is that unlike in the game, carrying a large load of bottle caps would make it pretty much impossible to sneak up on creatures:) I haven't played Fallout 4, but have played Fallout 3 and New Vegas. In those games a bottle cap is a bottle cap no matter what pretty colors are painted on them. From the Fallout world perspective, there's a fixed number of bottle caps in the world. So your question can be answered the same as if there's fixed amount of money. $\endgroup$
    – Dunk
    Oct 26 '17 at 20:19
  • $\begingroup$ The bottle cap is just a fun cultural meme to reflect the 80's. The 80's bottle cap is not durable and susceptible to rust. In addition, there is no real post-nuclear apocalypse that we can study on how soon the industralization can recover. $\endgroup$
    – mootmoot
    Nov 28 '17 at 9:18
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People in the nuclear post-apocalyptic world use bottle caps as barter money.

I love the series, so I can definitely answer with enthusiasm!

How would inflation work in such an economic environment?

In a fiat-monetary system, the supply of cash circulating in the system is defined and controlled by a central bank. Although the amount may seem arbitrary, i.e.let us print 100 million tomorrow, this would be extremely inflationary and as a result devalue the currency and its use within the economy. See Zimbabwe Dollar

But with bottle caps, the amount is fixed, but to a certain extent. Bottle caps can still be made. But as with all counterfeiting operations, newly minted caps =/= the consistency of old caps. The type of metal, paint, and even evidence of bottling may be distinctive enough to discern authentic caps from counterfeited caps. Nevertheless, the premise of the quest is that the trading company doesn't wish for the supply of caps to increase relative to demand, thereby retain the value of each cap in the long run.

In addition, metal caps wear out through use just like regular money. Although not represented in the game, this fact would act as a mechanism of which caps that have sufficiently deteriorated are removed from the system, acting as a deflationary mechanism.

How can people buy expensive objects like houses or maybe vehicles, (they cost at least 10000)?

Take a look at the table of items and their assigned values. Given that markets will reach an equilibrium in terms of price for each item bartered, the cost of a rare or expensive item would be determined by those who produce the item and desire the item. Although one might argue that current theories of the value of labor may apply in a post-apocalyptic world, I don't think there would be a high need for economists in that dystopian future, despite the dismal setting.

But as for how, there will be a need for banks for wealthy individuals to store their caps given the weight and bulk of caps. At established settlements, it would be a simple matter for me to write out a contract to you stipulating and instructing the bank to transfer my caps to your name.

How would a bank know if another has launched a new version of purple coin that is worth more than any other single bottle cap?

At least in lore, there are a handful of caps widely recognized by all factions: Nuka-Cola caps, Sunset Sarsaparilla Caps, and Bawls. At the same time, there are secondary currency systems: New California Republic Dollars, Legion currency, and Pre-War Money. All of which have (or had) a central authority, but not widely circulated or accepted. NCR money is not accepted in the Legion and vice versa. Pre-War Money has value, but isn't the primary means of currency use.

Given that all caps are equal, meaning no denominations, a user (regardless of status as a bank) would see if the logo on the caps would match his or her experience of caps that would be accepted by other participants in the market.

If a new bottle cap of unique color appears, how to corroborate that a bank in another village supports its value? (that is, that is not false).

Over time, and given that there is no significant production anymore, there will be a set amount of produced bottles and their corresponding caps. Just like there are authenticity experts today to verify the origins of cars the same can be said for a new cache of bottles found. The drinks are opened and an article is published by the media that either supports or refutes the authenticity of the new cache.

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How would inflation work in such an economic environment?

Supposedly, whenever a wastelander opens a bottle of Nuka-Cola, "new money" is injected into the world, so that would theoretically drive up inflation, but very minimally. Also, information asymmetry would certainly cause prices to fluctuate differently in different regions of the game. I think we need to assume that banks do not communicate with each other, at least not regularly.

How can people buy expensive objects like houses or maybe vehicles, (they cost at least 10000)?

While caps are definitely accepted as a form of currency in the Fallout world, many would opt to convert their caps to a larger capital asset that is easier to carry around. Then, the purchaser can use that to barter. It's not ideal to carry tens of thousands of caps, as you're probably implying.

How would a bank know if another has launched a new version of purple coin that is worth more than any other single bottle cap?

The bank would probably find out when someone tries to convert the new currency for purified water or whatever the good was. My guess is that the new currency would also be commodity-backed based on something else (stimpacks, perhaps?).

If a new bottle cap of unique color appears, how to corroborate that a bank in another village supports its value? (that is, that is not false).

Not sure how this would work. Maybe show the bank the bottle which the cap was found on? Show that it was indeed Nuka-Cola branded. Then, the bank can take-it-or-leave-it. I'm only aware of regular Nuka-Cola and Nuka-Cola quantum, and I think they have the same cap style.

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