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Money is more than memory

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  • Bigoni, Maria
  • Camera, Gabriele
  • Casari, Marco

Abstract

Impersonal exchange is the hallmark of an advanced society and money is one key institution that supports it. Economic theory regards money as a crude arrangement for monitoring counterparts’ past conduct. If so, then a public record of past actions—or memory—should supersede the function performed by money. This intriguing theoretical postulate remains untested. In an experiment, we show that the suggested functional equivalence between money and memory does not translate into an empirical equivalence: money removed the incentives to free ride, while memory did not. Monetary systems performed a richer set of functions than just revealing past behaviors.

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  • Bigoni, Maria & Camera, Gabriele & Casari, Marco, 2020. "Money is more than memory," Journal of Monetary Economics, Elsevier, vol. 110(C), pages 99-115.
    • Handle: RePEc:eee:moneco:v:110:y:2020:i:c:p:99-115
    DOI: 10.1016/j.jmoneco.2019.01.002
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    Cited by:

    1. Guilherme Carmona, 2021. "On the optimality of monetary trading," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(3), pages 1121-1160, April.
    2. Gabriele Camera & Marco Casari, 2018. "Monitoring institutions in indefinitely repeated games," Experimental Economics, Springer;Economic Science Association, vol. 21(3), pages 673-691, September.
    3. Borgonovo, Emanuele & Caselli, Stefano & Cillo, Alessandra & Masciandaro, Donato & Rabitti, Giovanni, 2021. "Money, privacy, anonymity: What do experiments tell us?," Journal of Financial Stability, Elsevier, vol. 56(C).
    4. Konstantin Chatziathanasiou & Svenja Hippel & Michael Kurschilgen, 2020. "Property, Redistribution, and the Status Quo," Munich Papers in Political Economy 02, Munich School of Politics and Public Policy and the School of Management at the Technical University of Munich.
    5. Eduardo Ferraciolli & Tanya Araújo, 2023. "Agent-based Modeling and the Sociology of Money: a Framework for the Study of Coordination and Plurality," Working Papers REM 2023/0285, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    6. Lambrecht, Marco & Sofianos, Andis & Xu, Yilong, 2020. "Does mining fuel bubbles? An experimental study on cryptocurrency markets," Working Papers 0690, University of Heidelberg, Department of Economics.
    7. M. Bigoni & G. Camera & M. Casari, 2015. "Money and the Scale of Cooperation," Working Papers wp1045, Dipartimento Scienze Economiche, Universita' di Bologna.
    8. Maria Bigoni & Gabriele Camera & Marco Casari, 2019. "Cooperation among strangers with and without a monetary system," Working Papers 19-01, Chapman University, Economic Science Institute.

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    More about this item

    Keywords

    Cooperation; Intertemporal trade; Experiments; Institutions; Social norms;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General

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