Money and the Scale of Cooperation

Maria Bigoni, Gabriele Camera and Marco Casari

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: This study reveals the existence of a causal link between the availability of money and an expanded scale of interaction. We constructed an experiment where participants chose the group size, either a low-value partnership or a high-value group of strangers, and then faced an intertemporal cooperative task. Theoretically, a monetary system was inessential to achieve cooperation. Empirically, without a working monetary system, participants were reluctant to expand the scale of interaction; and when they did, they ended up destroying surplus compared to partnerships, because cooperation collapsed in large groups. This economic failure was reversed only when participants managed to concurrently develop a stable monetary system.

JEL-codes: C70 C90 D80 (search for similar items in EconPapers)
Date: 2015-12
New Economics Papers: this item is included in nep-exp, nep-hpe and nep-soc
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Working Paper: Money and the Scale of Cooperation (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:wp1045

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