American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
The Coordination Value of Monetary Exchange: Experimental Evidence
American Economic Journal: Microeconomics
(pp. 290–314)
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.Citation
Camera, Gabriele, and Marco Casari. 2014. "The Coordination Value of Monetary Exchange: Experimental Evidence." American Economic Journal: Microeconomics 6 (1): 290–314. DOI: 10.1257/mic.6.1.290Additional Materials
JEL Classification
- C71 Cooperative Games
- C73 Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
- D40 Market Structure and Pricing: General
- E42 Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems