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Full-Text Articles in Economic Theory
Money Is More Than Memory, Maria Bigoni, Gabriele Camera, Marco Casari
Money Is More Than Memory, Maria Bigoni, Gabriele Camera, Marco Casari
ESI Working Papers
Impersonal exchange is the hallmark of an advanced society and money is one key institution that supports it. Economic theory regards money as a crude arrangement for monitoring counterparts’ past conduct. If so, then a public record of past actions—or memory—should supersede the function performed by money. This intriguing theoretical postulate remains untested. In an experiment, we show that the suggested functional equivalence between money and memory does not translate into an empirical equivalence: money removed the incentives to free ride, while memory did not. Monetary systems performed a richer set of functions than just revealing past behaviors.
Indefinitely Repeated Contests: An Experimental Study, Philip Brookins, Dmitry Ryvkin, Andrew Smyth
Indefinitely Repeated Contests: An Experimental Study, Philip Brookins, Dmitry Ryvkin, Andrew Smyth
ESI Working Papers
We experimentally explore indefinitely repeated contests. Theory predicts more cooperation, in the form of lower expenditures, in indefinitely repeated contests with a longer expected time horizon, yet our data do not support this prediction. Theory also predicts more cooperation in indefinitely repeated contests compared to finitely repeated contests of the same expected length, but we find no significant difference empirically. When controlling for risk and gender, we actually find significantly higher long-run expenditure in some indefinite contests relative to finite contests. Finally, theory predicts no difference in cooperation across indefinitely repeated winner-take-all and proportional-prize contests. We find significantly less cooperation …