The Coordination Value of Monetary Exchange: Experimental Evidence

American Economic Journals: Microeconomics (Forthcoming)

40 Pages Posted: 9 May 2013

See all articles by Gabriele Camera

Gabriele Camera

Chapman University - Economic Science Institute; University of Bologna - Dept. of Economics

Marco Casari

University of Bologna - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: May 2013

Abstract

What institutions can sustain cooperation in groups of strangers? Here we study the role of monetary systems. In an experiment, subjects sometimes needed help and sometimes could incur a cost to help an anonymous counterpart. In the absence of money, the intertemporal exchange of help, which could be supported by a norm of community punishment of defectors, did not emerge. Introducing intrinsically worthless tokens substantially altered patterns of behavior. Monetary trade emerged, which increased predictability of play and promoted cooperation when strangers could trade help for a token.

Keywords: cooperation, folk theorem, gift-giving, fiat money, repeated games

Suggested Citation

Camera, Gabriele and Casari, Marco, The Coordination Value of Monetary Exchange: Experimental Evidence (May 2013). American Economic Journals: Microeconomics (Forthcoming). Available at SSRN: https://ssrn.com/abstract=1463350

Gabriele Camera (Contact Author)

Chapman University - Economic Science Institute ( email )

Orange, CA 92866
United States

HOME PAGE: http://www1.chapman.edu/~camera/

University of Bologna - Dept. of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy

Marco Casari

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy

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