Gift Exchange versus Monetary Exchange:
Theory and Evidence
J. Du¤y and D. Puzzello
U. Pittsburgh and U. Illinois
June 2011
Du¤y and Puzzello (Pittsburgh & Illinois)
Gift versus Monetary Exchange
June 2011
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MOTIVATION
Why do we use money in economic transactions?
Likely due to various frictions:
Lack of a double coincidence of wants.
Lack of perfect commitment/formal enforcement mechanisms.
Lack of perfect record-keeping/monitoring.
These frictions generally rule out non-monetary, “cooperative
outcomes” arising from inde…nite repeated play and render money
“essential”.
Du¤y and Puzzello (Pittsburgh & Illinois)
Gift versus Monetary Exchange
June 2011
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ESSENTIALITY OF MONEY
De…nition
Essentiality: more and/or better outcomes can be supported as equilibria
with money than without money.
The essentiality of money is related to the inability of agents to
sustain cooperation and “good allocations” in equilibrium.
The introduction of money can therefore be Pareto improving:
Prominent example is Kiyotaki-Wright (1989), which relies on
random, anonymous matching as a friction to generate an essential
role for money (commodity or …at).
But, this model is not very tractable. Experimentally studied by Du¤y
and Ochs (1999, 2002).
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Gift versus Monetary Exchange
June 2011
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FRICTIONS AND TRACTABILITY
Lagos and Wright, JPE 2005 modify the typical money search model
How?
Alternation between ‘centralized’and ‘decentralized’markets; random
matching only in the decentralized market. In the centralized market,
all players meet together in a market aimed at rebalancing money
holdings.
Why?
Construct a tractable monetary economy; the centralized market
appended to the decentralized market along with quasi-linear
preferences makes the distribution of money holdings degenerate.
Du¤y and Puzzello (Pittsburgh & Illinois)
Gift versus Monetary Exchange
June 2011
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TRACTABILITY AND ESSENTIALITY
What are the implications of adding a centralized meeting (CM) for
the essentiality of money? Aliprantis et al. (Econometrica 2007) show
that if there is CM and individual actions are observable, then money
is not essential in LW: the …rst best can be supported in the absence
of money.
With a …nite population size (as in laboratory settings), and with
su¢ ciently patient agents, money may no longer be essential as it is
possible to sustain play of the …rst best outcome as an equilibrium of
the (inde…nitely) repeated game by use of the contagious strategy
(e.g., Kandori (1992), Ellison (1994), Araujo (2004), Araujo,
Camargo, Minetti and Puzzello (2010)).
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Gift versus Monetary Exchange
June 2011
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WHAT DO WE DO?
Develop modi…ed versions of LW (Money, M) and Aliprantis et al.
(No Money, NM) with …nite populations.
Show money is not theoretically essential in these environments; the
stationary monetary equilibrium improves upon the autarkic
equilibrium but is Pareto inferior to the …rst-best non-monetary
equilibrium.
Implement modi…ed LW and Aliprantis et al. models in the laboratory.
Is behavior consistent with the theoretical predictions? Which
equilibrium is selected?
Does the population size matter for the essentiality and value of
money?
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Gift versus Monetary Exchange
June 2011
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MAIN FINDINGS
In the environment with money, choices are consistent with monetary
equilibrium predictions.
In the environment without money, outcomes are closer to autarky
than to the …rst-best.
Money is empirically, if not theoretically, essential: Welfare is higher
in economies with money than in economies without money.
Du¤y and Puzzello (Pittsburgh & Illinois)
Gift versus Monetary Exchange
June 2011
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WHY IMPORTANT?
Multiple equilibria: First best, monetary, autarky. Equilibrium selection
is ultimately an empirical question, a good reason to go to the lab.
Di¢ cult to sustain any kind of cooperation without money.
Monetary exchange is more common. Gift exchange predominates
only when money is explicitly ruled out.
Money is an e¢ ciency enhancing coordination device.
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Gift versus Monetary Exchange
June 2011
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ENVIRONMENT WITH MONEY
Modi…ed LW (2005) environment
Finite population of in…nitely-lived agents j 2 J (J is …nite and jJ j = 2N)
Time is discrete t = 1, 2, . . .
Each period has two stages
Stage 1: Agents are uniformly and randomly matched in pairs in the
decentralized market (DM)
Stage 2: All agents meet in the centralized Walrasian market (CM)
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Gift versus Monetary Exchange
June 2011
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ENVIRONMENT WITH MONEY
Preferences are additively separable across stages and periods
All agents have the same discount factor β 2 (0, 1)
(No discounting within stages)
Special good in Stage 1; General good in Stage 2. Goods perishable across
dates and stages
Fiat money is storable and in a …xed supply, M
No commitment and no formal enforcement
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Gift versus Monetary Exchange
June 2011
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DECENTRALIZED MARKET
An agent is either a producer or a consumer of special good with equal
probability
Every meeting is single coincidence
Payo¤:
u (x ) utility of consumption of x units of the special good
c (y ) disutility of production of y units of the special good
u, c satisfy standard assumptions; 9 q > 0 with u 0 (q ) = c 0 (q )
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Gift versus Monetary Exchange
June 2011
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EXCHANGE IN THE DM
Timing of events in a meeting:
Consumer proposes terms of trade (q, d ) according to a take-it-or-leave-it
bargaining protocol
Producer accepts or rejects the o¤er
If the o¤er is accepted, then trade takes place, else meeting is autarkic
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Gift versus Monetary Exchange
June 2011
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CENTRALIZED MARKET
Agents are both consumers and producers. Each agent can produce units
of a general good. Trades for the general good involve money. Purpose is
to rebalance money holdings.
Quasilinear preferences:
X utility of consumption of X units of the general good and
of producing Y
Total Period Payo¤= u (x )
Du¤y and Puzzello (Pittsburgh & Illinois)
c (y ) + X
Y disutility
Y
Gift versus Monetary Exchange
June 2011
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MONETARY EQUILIBRIUM
Characterized by the solution to a dynamic programming problem, ignoring
repeated game dynamics (i.e., the possibility that agents coordinate on a
cooperative, “social norm”).
1 β
u 0 (qe)
Quantity in the DM q
e : c 0 (qe) = 1 + β/2 . Notice that q
e ! q as β ! 1.
So for β < 1, q̃ < q .
Price of good in DM p : p =
M /2N
qe
Price of money in CM φ : φ =
c (qe)
M /2N
Money distribution in DM is degenerate at M/2N
Du¤y and Puzzello (Pittsburgh & Illinois)
Gift versus Monetary Exchange
June 2011
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OTHER EQUILIBRIA: GIFT-GIVING SOCIAL NORMS
There exists a decentralized social norm supporting the …rst-best outcome
in the money environment.
Strategy is as follows:
“Do not participate in the CM. Participate only in the DM.
Propose (q , 0) every time you are a consumer and accept (q , 0)
whenever you are a producer, so long as everyone has produced q for you
in your past meetings. If you have observed a deviation then, whenever a
producer, reject the terms of trade forever after”
Under some conditions, we show this strategy supports the …rst best
equilibrium.
Du¤y and Puzzello (Pittsburgh & Illinois)
Gift versus Monetary Exchange
June 2011
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ENVIRONMENT WITHOUT MONEY
Modi…ed version of Aliprantis et al. (2007).
Same features as other environment, but
- no money
- decentralized and centralized meetings
Centralized meeting: agents choose production of general good and get to
consume average production
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Gift versus Monetary Exchange
June 2011
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EQUILIBRIA: GIFT-GIVING SOCIAL NORMS
There exists a centralized social norm that supports the …rst-best as
sequential equilibrium
“In the decentralized meeting, propose q whenever you are a consumer
and accept to produce q whenever you are a producer.
Produce L 2 [0, q ] in the centralized meeting. Continue to do so if you
have observed cooperation (i.e., you received or produced q and L was
the average production in the CM). If you have observed a deviation, then
choose reject whenever a producer in the decentralized meeting and
produce 0 forever after in the centralized meeting”
Intuition: since …nite population agents can use CM to spread information
about a deviation, the presence of the CM should strengthen
attractiveness of cooperation as contagion is more immediate.
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Gift versus Monetary Exchange
June 2011
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CONDITIONS FOR EQUILIBRIUM
The gift-giving social norm can be supported as a sequential
n
o Nash
equilibrium if agents are patient enough: β max β, β with
β=
and
β=
2N 2
2N L +q
2N 2
L
+
q + 12 [u (q
2N
2N 1
2N L
2N 1
1
L
+
2N
2 [u (q
) q ]
) q ]
These conditions guarantee that on-equilibrium agents have incentives to
follow the gift-giving strategy in DM and CM
Du¤y and Puzzello (Pittsburgh & Illinois)
Gift versus Monetary Exchange
June 2011
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DESIGN
Two treatment variables
Environment: Money (M)/No money (NM)
Population size: 2N = 6 or 2N = 14
2
2 design
2N = 6
2N = 14
Du¤y and Puzzello (Pittsburgh & Illinois)
M
4 Sessions
4 Sessions
NM
4 Sessions
4 Sessions
Gift versus Monetary Exchange
June 2011
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GENERAL SETUP
Each session consisted of several sequences (supergames)
Each sequence consisted of an inde…nite number of repetitions
(periods) of a stage game
Each stage game involved 2 rounds, a decentralized meeting round
and a centralized meeting round
Every sequence began with the play of at least one, two-round stage
game
At the end of each stage game, the sequence continued with another
repetition (period) of the stage game with probability β = 5/6 and
ended with probability 1 β = 1/6
Sessions averaged 31.1 total periods; on average 5.7 sequences were
played in each session with each sequence having an average length of
5.5 rounds
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Gift versus Monetary Exchange
June 2011
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GENERAL SETUP, Cont’d
Subjects were initially endowed with 20 points
In the M treatment, at the start of each new inde…nite length
sequence, each subject was endowed with 8 tokens
Subjects earned points from consumption and lost points from
production. In the money treatment they are instructed that "tokens"
have no point (redemption) value
Utility from decentralized market consumption, u (x ) = A log(1 + x ).
All other utility and cost functions were linear. These functions were
presented to subjects as tables mapping quantities into points
Subjects’s point totals from all sequences played were converted into
money at the known rate of 1 point = $0.20 cent. Average total
earnings were $23.54 per subject for a 2.25 hour experiment
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Gift versus Monetary Exchange
June 2011
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Decentralized Meeting
2N Subjects randomly formed into N pairs. One member randomly
selected to be the consumer, the other the producer
Consumers make a proposal: q 2 [0, q ]. In the M treatment, they can
also o¤er d 2 [0, mt ] of their current money holdings, mt
Producers accept or reject the proposal. In the money treatment, the
decision can be conditioned on their own current money balance,
mp,t , and that of the consumer with whom they were paired, mc ,t
If accepted:
The producer gives up q points. In the M treatment s/he receives d
additional tokens
The consumer gains u (q ) points. In the M treatment s/he gives up the
d tokens o¤ered in the proposal
If rejected: No exchange; point totals and token balances are
unchanged
Following outcome of the Decentralized meeting –> Centralized
Meeting
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Gift versus Monetary Exchange
June 2011
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Centralized Meeting
M treatment: subjects decide whether to be a buyer, seller or
non-participant in the market for the homogeneous good X.
Consumption (production) of 1 unit of good X is worth (costs) 1 point
Buyers submit a quantity and per unit bid price in tokens for good X,
subject to budget constraints
Sellers submit a quantity and per unit ask price in tokens for good X
A centralized market clearing mechanism sorted bids from highest to
lowest and asks from lowest to highest. The intersection determines
the market price, P. All transactions involving the exchange of tokens
for goods take place at price P
NM treatment: subjects indicate how many units x 2 f0, 1g they
wished to produce of good X. Consumption (production) of 1 unit of
good X is worth (costs) 1 point
The average number of units of good X produced, x, is calculated
Subjects’net payo¤ (consumption-production) in points from the
centralized meeting was x x
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Gift versus Monetary Exchange
June 2011
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Continuation of a Sequence
Following completion of the Centralized Meeting, a die roll
determined whether or not the sequence continued with a new
2-round period (stage game)
If a 1,2,3,4,or 5 was rolled, the sequence continued with another
2-round period
In the M treatment, if a sequence continued, each subjects’token
balances as of the end of the centralized meeting were carried over to
the decentralized round of the new period
If a 6 was rolled, the sequence was declared over
In the M treatment, if a sequence ended, then all subjects’token
balances were set to zero
Depending on the time available a new sequence might then begin
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Gift versus Monetary Exchange
June 2011
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Parameterization and Predictions
M/2N = 8. Known, constant money supply M = 48 if N = 3; 112 if
N=7
First best eq. DM quantity: u (q ) = 7 log(1 + q ), c (q ) = q,
q : u 0 (q ) = c 0 (q ) ) q = 6
Monetary eq. decentralized market quantity of special good:
q̃ : ((u 0 (q̃ ))/(c 0 (q̃ ))) = 1 + ((1 β)/( β/2)) ) q̃ = 4
Monetary eq. decentralized market price of special good:
((M/2N )/q̃ ) = (8/4) = 2
Monetary eq. centralized market price of general good:
(M/2N )/c (q̃ ) = 2
Monetary eq. centralized market trade volume: 4N: 12 if N = 3; 28
if N = 7
First best eq. payo¤ per pair per period: v = 7 log 7 6 = 7.62
points
Monetary eq. payo¤ per pair per period: v = 7 log 5 4 = 7.26
points
Du¤y and Puzzello (Pittsburgh & Illinois)
Gift versus Monetary Exchange
June 2011
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FINDING 1
There are no di¤erences in o¤er acceptance rates across M and NM
treatments. In the money treatment, more than 95% of proposals involve
positive amounts of tokens.
Du¤y and Puzzello (Pittsburgh & Illinois)
Gift versus Monetary Exchange
June 2011
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Support for Finding 1
Session No.,
Treatment
Acceptance Rates %
1 st half
2 nd half
All
% Monetary O¤ers
1 st half
2 nd half
All
1, M6
2, M6
3, M6
4, M6
Avg. 1-4
53.3
50.0
42.2
47.9
48.3
35.6
57.8
48.9
70.6
53.8
44.4
54.0
45.6
59.6
51.1
93.3
92.9
97.8
93.8
94.4
86.7
95.6
100
100
95.7
90.0
94.3
98.9
97.0
95.1
5, M14
6, M14
7, M14
8, M14
Avg. 5-8
32.5
35.7
46.2
42.9
40.2
42.9
32.4
46.2
42.9
41.2
37.9
34.0
46.2
42.9
40.7
100
99.0
98.3
99.2
99.0
94.0
94.3
93.3
91.3
93.1
96.9
96.6
95.8
95.1
96.0
9, NM6
10, NM6
11, NM6
12, NM6
Avg. 9-12
52.1
58.3
22.2
62.2
48.9
68.6
52.1
25.0
60.0
51.6
60.6
55.2
23.7
61.1
50.3
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
13, NM14
14, NM14
15, NM14
16, NM14
Avg. 13-16
36.1
44.8
29.4
46.7
38.8
39.5
45.9
46.2
34.8
41.6
37.8
45.3
37.8
40.6
40.2
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Table: Average Acceptance Rates and % Monetary O¤ers Each Session
Du¤y and Puzzello (Pittsburgh & Illinois)
Gift versus Monetary Exchange
June 2011
27 / 43
FINDING 2
Proposals are less likely to be accepted as the quantity requested
increases. In the Money treatment, proposals are more likely to be
accepted the higher the number of tokens o¤ered.
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Gift versus Monetary Exchange
June 2011
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Support for Finding 2
Constant
Session
Group14
NewSeq
Period
PriorCons
HLscore
Money
q
d
Dependent Variable, Accept=1, Reject=0
All Sessions
NM Sessions
M Sessions (1)
0.197
2.508
0.989
(0.638)
(1.427)
(0.308)
0.019
-0.094
0.060
(0.057)
(0.127)
(0.058)
-0.382
0.158
-0.687
(0.268)
(0.601)
(0.272)
0.285
0.460
0.360
(0.077)
(0.122)
(0.111)
-0.010
-0.033
-0.074
(0.003)
(0.005)
(0.006)
0.182
0.317
0.038
(0.063)
(0.098)
(0.088)
-0.018
-0.045
-0.002
(0.036)
(0.084)
(0.035)
0.556
(0.472)
-0.151
-0.658
-0.344
(0.014)
(0.582)
(0.031)
0.208
(0.024)
d /q
mp
mc
No. obs.
2,487
1,274
M Sessions (2)
-0.356
(0.315)
0.015
(0.062)
-0.614
(0.288)
0.306
(0.110)
-0.0489
(0.006)
-0.0173
(0.0924)
-0.008
(.0372)
-0.015
(0.008)
0.002
(0.012)
1.219
(0.094)
-0.014
(0.008)
-0.029
(0.009)
1,213
1,184
Table: Probit Regression Analysis of Proposal Acceptance Decisions
Du¤y and Puzzello (Pittsburgh & Illinois)
Gift versus Monetary Exchange
June 2011
29 / 43
FINDING 3
Quantities exchanged in the decentralized meeting are signi…cantly greater
when there is money than when there is no money. However, quantities in
both environments are well below the e¢ cient equilibrium level.
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Gift versus Monetary Exchange
June 2011
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Support for Finding 3
Du¤y and Puzzello (Pittsburgh & Illinois)
Gift versus Monetary Exchange
June 2011
31 / 43
Support for Finding 3, cont’d
Session No.,
Treatment
1 st half
Average q
2 nd half
All
1 st half
Average d
2 nd half
All
1 st half
Avg. Price
2 nd half
All
1, M6
2, M6
3, M6
4, M6
Avg. 1-4
5.05
4.62
5.05
3.32
4.49
4.19
4.25
4.09
3.00
3.85
4.68
4.41
4.54
3.12
4.16
5.59
5.10
4.54
4.33
4.88
5.63
5.80
6.90
5.61
5.97
5.61
5.48
5.81
5.14
5.50
1.18
1.12
0.92
1.52
1.19
1.31
1.37
1.73
1.88
1.58
1.23
1.25
1.35
1.75
1.41
5, M14
6, M14
7, M14
8, M14
Avg. 5-8
3.64
4.49
4.00
4.48
4.19
3.81
2.09
2.46
3.00
2.79
3.74
3.34
3.24
3.75
3.51
4.27
4.03
5.28
5.30
4.80
6.03
4.54
5.46
5.87
5.47
5.29
4.28
5.36
5.58
5.16
1.15
0.96
1.40
1.33
1.23
1.61
2.31
2.37
1.96
2.09
1.42
1.60
1.87
1.64
1.65
9, NM6
10, NM6
11, NM6
12, NM6
Avg. 9-12
1.55
1.36
1.70
1.63
1.56
1.26
1.13
0.57
1.07
1.01
1.37
1.25
1.11
1.35
1.27
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
13, NM14
14, NM14
15, NM14
16, NM14
Avg. 13-16
1.67
1.89
1.24
1.49
1.56
0.99
1.08
0.69
0.94
0.92
1.31
1.46
0.91
1.24
1.22
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Table: Trade Average O¤er Quantities and Prices, Each Session
Du¤y and Puzzello (Pittsburgh & Illinois)
Gift versus Monetary Exchange
June 2011
32 / 43
FINDING 4
Welfare is higher in economies with money than in economies without
money.
Du¤y and Puzzello (Pittsburgh & Illinois)
Gift versus Monetary Exchange
June 2011
33 / 43
Support for Finding 4
Session No.,
Treatment
E¢ ciency w.r.t First Best Eq.
1 st half
2 nd half
All Periods
E¢ ciency w.r.t. Monetary Eq.
1 st half
2 nd half
All Periods
1, M6
2, M6
3, M6
4, M6
Avg. 1-4
0.45
0.46
0.40
0.36
0.42
0.30
0.53
0.44
0.60
0.47
0.37
0.49
0.42
0.43
0.43
0.47
0.48
0.42
0.38
0.44
0.31
0.55
0.46
0.63
0.49
0.39
0.52
0.44
0.45
0.45
4, M14
5, M14
6, M14
7, M14
Avg. 5-8
0.29
0.30
0.40
0.35
0.34
0.36
0.21
0.31
0.27
0.28
0.32
0.25
0.36
0.30
0.31
0.30
0.31
0.42
0.36
0.36
0.37
0.22
0.33
0.29
0.30
0.34
0.26
0.37
0.32
0.39
7, NM6
8, NM6
9, NM6
10, NM6
Avg. 9-12
0.28
0.34
0.14
0.39
0.29
0.36
0.26
0.07
0.31
0.25
0.33
0.30
0.10
0.35
0.27
0.30
0.36
0.15
0.41
0.30
0.38
0.27
0.08
0.33
0.26
0.35
0.31
0.11
0.37
0.29
11, NM14
12, NM14
13, NM14
14, NM14
Avg. 13-16
0.22
0.28
0.16
0.28
0.23
0.20
0.24
0.17
0.17
0.19
0.21
0.26
0.17
0.23
0.21
0.23
0.29
0.17
0.29
0.24
0.21
0.25
0.18
0.18
0.20
0.22
0.27
0.17
0.24
0.22
Table: E¢ ciency Relative to First Best or Monetary Equilibrium, Each Session
Du¤y and Puzzello (Pittsburgh & Illinois)
Gift versus Monetary Exchange
June 2011
34 / 43
FINDING 5
Welfare is higher in treatment M6 as compared with treatment M14; there
is no welfare di¤erence between treatments NM6 and NM14.
Support for this …nding is found in the same Table used in support of
Finding 4.
Du¤y and Puzzello (Pittsburgh & Illinois)
Gift versus Monetary Exchange
June 2011
35 / 43
FINDING 6
In the M treatments, centralized market prices and trade volume are lower
than predicted in the monetary equilibrium. The distribution of money
holdings at the end of the centralized market is not degenerate. However,
there is evidence that subjects are using the centralized meeting to
re-balance their money holdings.
Du¤y and Puzzello (Pittsburgh & Illinois)
Gift versus Monetary Exchange
June 2011
36 / 43
Support for Finding 6
Session No.,
Treatment
Particp.
Rate
Avg. Centralized Mkt. Price
1 st half
2 nd half
All Periods
Avg. Centralized Mkt. Volume
1 st half
2 nd half
All Periods
1, M6
2, M6
3, M6
4, M6
Avg. 1-4
.81
.77
.87
.87
.83
1.16
0.96
1.26
2.43
1.48
1.30
1.03
1.55
1.84
1.44
1.23
0.99
1.41
2.11
1.46
8.08
8.29
4.29
3.85
6.05
5.46
5.27
3.80
5.31
4.97
6.77
6.72
4.03
4.65
5.51
5, M14
6, M14
7, M14
8, M14
Avg. 5-8
.79
.67
.80
.66
.73
1.30
2.52
1.67
1.36
1.71
1.58
3.16
2.31
1.52
2.14
1.45
2.85
1.99
1.44
1.93
9.82
4.54
12.18
14.35
10.55
6.67
4.15
9.00
10.73
7.88
8.17
4.35
10.59
12.66
9.23
Table: Participation Rates, Market Prices and Volume in the Centralized Round
of the Money Treatment Sessions
Du¤y and Puzzello (Pittsburgh & Illinois)
Gift versus Monetary Exchange
June 2011
37 / 43
Support for Finding 6, cont’d
Du¤y and Puzzello (Pittsburgh & Illinois)
Gift versus Monetary Exchange
June 2011
38 / 43
Support for Finding 6, cont’d
Du¤y and Puzzello (Pittsburgh & Illinois)
Gift versus Monetary Exchange
June 2011
39 / 43
Support for Finding 6, cont’d
Du¤y and Puzzello (Pittsburgh & Illinois)
Gift versus Monetary Exchange
June 2011
40 / 43
FINDING 7
In the NM treatments, contributions to the public good in the centralized
meeting are close to zero irrespective of the population size.
Du¤y and Puzzello (Pittsburgh & Illinois)
Gift versus Monetary Exchange
June 2011
41 / 43
Support for Finding 7
Session No.,
Treatment
Average Public Good Contribution
1 st half
2 nd half
All Periods
9, NM6
10, NM6
11, NM6
12, NM6
Avg. 9-12
0.06
0.20
0.04
0.00
0.08
0.03
0.04
0.00
0.00
0.02
0.05
0.12
0.02
0.00
0.05
13, NM14
14, NM14,
15, NM14,
16, NM14,
Avg. 13-16
0.02
0.02
0.01
0.04
0.02
0.01
0.01
0.00
0.02
0.01
0.02
0.02
0.01
0.03
0.02
Table: Average Public Good Contributions in the Centralized Round of the No
Money Treatment Sessions
Du¤y and Puzzello (Pittsburgh & Illinois)
Gift versus Monetary Exchange
June 2011
42 / 43
CONCLUSIONS AND FUTURE WORK
Money is empirically essential and other social norms are di¢ cult to
emerge and sustain.
Robustness of money relative to other decentralized mechanisms, e.g.
communication.
What other institutional features facilitate the emergence and
sustainability of cooperation?
Will a Friedman rule be optimal?
Du¤y and Puzzello (Pittsburgh & Illinois)
Gift versus Monetary Exchange
June 2011
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