Globalization creates new opportunities for cooperation across vast networks of individuals who may never meet. Social exclusion and monetary exchange are institutions that in theory can incentivize cooperation. But what encourages cooperation most effectively – money or social exclusion?

In this episode of the CLE Vlog & Podcast Series, Prof. Maria Bigoni (University of Bologna) and Maurizia Di Buono (ETH Zurich) discuss Prof. Bigoni's paper "Money and Social Exclusion in Networks" (joint with Gabriele Camera and Eoardo Gallo). In an experiment, the authors evaluate the relative performance and interaction of monetary exchange and social exclusion in anonymous networks of different sizes. The results suggest that 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.

The study offers an important insight: in an increasingly globalized world, well-functioning monetary systems are more effective than social exclusion in fostering cooperation across large and diverse communities.

Paper Reference:

Maria Bigoni (University of Bologna)

Gabriele Camera (Chapman University)

Edoardo Gallo (University of Cambridge)

Money and Social Exclusion in Networks

https://ideas.repec.org/p/chu/wpaper/25-06.htmlAudio

Credits for Trailer:

AllttA by AllttA

https://youtu.be/ZawLOcbQZ2w

Money and Social Exclusion in Networks — Maria Bigoni (University of Bologna)

Talking law and economics at ETH Zurich

Money and Social Exclusion in Networks — Maria Bigoni (University of Bologna)