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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. One key institution for impersonal exchange is money, which economic theory considers just a primitive arrangement for monitoring past conduct in society. If so, then a public record of past actions - or memory - supersedes the function performed by money. This intriguing theoretical postulate remains untested. In an experiment, we show that the suggested functional equality between money and memory does not translate into an empirical equivalence. Monetary systems perform a richer set of functions than just revealing past behaviors, which proves to be crucial in promoting large-scale cooperation.

Suggested Citation

  • Bigoni, Maria & Camera, Gabriele & Casari, Marco, 2014. "Money is more than memory," CFS Working Paper Series 496, Center for Financial Studies (CFS).
  • Handle: RePEc:zbw:cfswop:496
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    Cited by:

    1. Gabriele Camera & Marco Casari, 2018. "Monitoring institutions in indefinitely repeated games," Experimental Economics, Springer;Economic Science Association, vol. 21(3), pages 673-691, September.
    2. M. Bigoni & G. Camera & M. Casari, 2015. "Money and the Scale of Cooperation," Working Papers wp1045, Dipartimento Scienze Economiche, Universita' di Bologna.

    More about this item

    Keywords

    cooperation; intertemporal trade; experiments; social norms; social dilemmas;

    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
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy

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