The Coordination Value of Monetary Exchange: Experimental Evidence
A new behavioral foundation is uncovered for why money promotes impersonal exchange. In an experiment, subjects could cooperate by intertemporally exchanging goods with anonymous opponents met at random. Indefinite repetition supported multiple equilibria, from full defection to the efficient outcome. Introducing the possibility to hold and exchange intrinsically worthless tickets affected outcomes and cooperation patterns. Tickets resembled fiat money, which emerged as a tool for equilibrium selection in the economy. Monetary exchange facilitated coordination on cooperation and redistributed surplus from defectors to cooperators. Treatments where subjects could develop a reputation revealed a limited record-keeping role for monetary exchange.
|Date of creation:||Aug 2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.krannert.purdue.edu/programs/phd
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Stefan Krasa & Anne P. Villamil, 2000. "Optimal Contracts when Enforcement Is a Decision Variable," Econometrica, Econometric Society, vol. 68(1), pages 119-134, January.
- John Duffy, 2008. "Macroeconomics: A Survey of Laboratory Research," Working Papers 334, University of Pittsburgh, Department of Economics, revised Jun 2014.
- Andreoni,J. & Vesterlund,L., 1998.
"Which is the fair sex? : Gender differences in altruism,"
10, Wisconsin Madison - Social Systems.
- James Andreoni & Lise Vesterlund, 2001. "Which Is The Fair Sex? Gender Differences In Altruism," The Quarterly Journal of Economics, MIT Press, vol. 116(1), pages 293-312, February.
- Andreoni, James & Vesterlund, Lise, 2001. "Which is the Fair Sex? Gender Differences in Altruism," Staff General Research Papers 1951, Iowa State University, Department of Economics.
- Ernst Fehr & Simon G�chter, 2000.
"Fairness and Retaliation: The Economics of Reciprocity,"
Journal of Economic Perspectives,
American Economic Association, vol. 14(3), pages 159-181, Summer.
- Ernst Fehr & Simon Gaechter, 2000. "Fairness and Retaliation: The Economics of Reciprocity," CESifo Working Paper Series 336, CESifo Group Munich.
- Ernst Fehr & Simon Gaechter, . "Fairness and Retaliation: The Economics of Reciprocitys," IEW - Working Papers 040, Institute for Empirical Research in Economics - University of Zurich.
- Kandori, Michihiro, 1992.
"Social Norms and Community Enforcement,"
Review of Economic Studies,
Wiley Blackwell, vol. 59(1), pages 63-80, January.
- Duffy, John & Ochs, Jack, 2009.
"Cooperative behavior and the frequency of social interaction,"
Games and Economic Behavior,
Elsevier, vol. 66(2), pages 785-812, July.
- John Duffy & Jack Ochs, 2004. "Cooperative Behavior and the Frequency of Social Interaction," Levine's Working Paper Archive 122247000000000060, David K. Levine.
- John Duffy & Jack Ochs, 2006. "Cooperative Behavior and the Frequency of Social Interaction," Working Papers 274, University of Pittsburgh, Department of Economics, revised Jul 2008.
- John Duffy & Jack Ochs, 2004. "Cooperative Behavior and the Frequency of Social Interaction," Levine's Bibliography 122247000000000108, UCLA Department of Economics.
- Jim Engle-Warnick & Robert L. Slonim, 2001.
"Inferring Repeated Game Strategies From Actions: Evidence From Trust Game Experiments,"
Economics Series Working Papers
2001-W13, University of Oxford, Department of Economics.
- Jim Engle-Warnick & Robert Slonim, 2006. "Inferring repeated-game strategies from actions: evidence from trust game experiments," Economic Theory, Springer, vol. 28(3), pages 603-632, 08.
- Jim Engle-Warnick & Robert L. Slonim, 2001. "Inferring Repeated Game Strategies From Actions: Evidence From Trust Game Experiments," Economics Papers 2001-W13, Economics Group, Nuffield College, University of Oxford.
- Martin Brown & Armin Falk & Ernst Fehr, 2004.
"Relational Contracts and the Nature of Market Interactions,"
Econometric Society, vol. 72(3), pages 747-780, 05.
- Brown, Martin & Falk, Armin & Fehr, Ernst, 2003. "Relational Contracts and the Nature of Market Interactions," IZA Discussion Papers 897, Institute for the Study of Labor (IZA).
- Gabriele Camera & Marco Casari & Maria Bigoni, 2010. "Cooperative Strategies in Groups of Strangers: An Experiment," Purdue University Economics Working Papers 1237, Purdue University, Department of Economics.
- Gabriele Camera & Marco Casari, 2009. "Cooperation among Strangers under the Shadow of the Future," American Economic Review, American Economic Association, vol. 99(3), pages 979-1005, June.
- Engle-Warnick, J. & Slonim, Robert L., 2006. "Learning to trust in indefinitely repeated games," Games and Economic Behavior, Elsevier, vol. 54(1), pages 95-114, January.
- Joseph Henrich & Robert Boyd & Samuel Bowles & Colin Camerer & Ernst Fehr & Herbert Gintis & Richard McElreath & Michael Alvard & Abigail Barr & Jean Ensminger & Kim Hill & Francisco Gil-White & Micha, 2001. "Economic Man in Cross-Cultural Perspective: Behavioral Experiments in Fifteen Small-Scale Societies," Working Papers 01-11-063, Santa Fe Institute.
- Ostroy, Joseph M. & Starr, Ross M., 1990.
"The transactions role of money,"
Handbook of Monetary Economics,
in: B. M. Friedman & F. H. Hahn (ed.), Handbook of Monetary Economics, edition 1, volume 1, chapter 1, pages 3-62
- John Duffy & Jack Ochs, 2002. "Intrinsically Worthless Objects as Media of Exchange: Experimental Evidence," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(3), pages 637-674, August.
- Ortmann, Andreas & Tichy, Lisa K., 1999. "Gender differences in the laboratory: evidence from prisoner's dilemma games," Journal of Economic Behavior & Organization, Elsevier, vol. 39(3), pages 327-339, July.
When requesting a correction, please mention this item's handle: RePEc:pur:prukra:1239. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Krannert PHD)
If references are entirely missing, you can add them using this form.