Money and Social Exclusion in Networks

Maria Bigoni, Gabriele Camera () and Edoardo Gallo
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Maria Bigoni: University of Bologna
Gabriele Camera: Economic Science Institute, Chapman University
Edoardo Gallo: University of Cambridge

Working Papers from Chapman University, Economic Science Institute

Abstract: Globalization offers unparalleled opportunities to expand welfare through cooperation across large networks of unrelated individuals. Social exclusion – permanent or temporary – and monetary exchange are institutions that in theory can incentivize cooperation. In an experiment, we evaluate their relative performance and interaction in anonymous networks of different sizes. Permanent social exclusion (ostracism) reduces long-run economic potential by leading to sparse networks. Monetary exchange and temporary social exclusion perform similarly well in small networks. In large networks, however, monetary exchange is the only institution that promotes full cooperation by crowding out ostracism and keeping the network complete. An insight is that monetary systems outperform social exclusion mechanisms in promoting cooperation in globalized social and economic networks.

Keywords: cooperation; experiment; money; network; social exclusion (search for similar items in EconPapers)
JEL-codes: C73 C92 D85 E40 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-exp, nep-net and nep-pay
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Persistent link: https://EconPapers.repec.org/RePEc:chu:wpaper:25-06

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