The Devil’s Dung? Money as a mechanism of generalized reciprocity in human societies

Eduardo C. Ferraciolli, Francesco Renzini, Tanya V. Araújo and Flaminio Squazzoni

No 2025/0379, Working Papers REM from ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa

Abstract: St. Francis of Assisi (1181/82-1226) famously called money the devil’s dung, and indeed money is often associated with greed, inequality, and corruption. Drawing on Nowak’s five rules for the evolution of cooperation, we argue here that money promotes the formation of circuits of generalized reciprocity across human groups that are fundamental to social evolution. In an evolutionary tournament, we show that money exchange is an evolutionarily stable strategy that promotes cooperation without relying on the cognitive demands of direct reciprocity or reputation mechanisms. However, we also find that excessive liquidity can be detrimental because it can distort the informational value of money as a signal of past cooperation, making defection more profitable. Our results suggest that, in addition to institutions that promoted trust and punishment, the emergence of institutions that regulated the money supply was key to maintaining generalized reciprocity within and across human groups.

Keywords: money; cooperation; reputation; generalized reciprocity; evolution. (search for similar items in EconPapers)
JEL-codes: C23 E52 E58 E62 G12 (search for similar items in EconPapers)
Date: 2025-05
New Economics Papers: this item is included in nep-evo, nep-his, nep-pay and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://rem.rc.iseg.ulisboa.pt/wps/pdf/REM_WP_0379_2025.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ise:remwps:wp03792025

Access Statistics for this paper

More papers in Working Papers REM from ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa ISEG - Lisbon School of Economics and Management, REM, R. Miguel Lupi, 20, LISBON, PORTUGAL.
Bibliographic data for series maintained by Sandra Araújo ().