Money and Social Exclusion in Networks

Authors

Maria Bigoni, University of Bologna
Gabriele Camera, Chapman UniversityFollow
Edoardo Gallo, University of Cambridge

Document Type

Article

Publication Date

7-17-2025

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.

Comments

ESI Working Paper 25-06

Recommended Citation

Bigoni, M., Camera, G., & Gallo, E. (2025, Jul. 17). Money and social exclusion in networks. ESI Working Paper 25-06. https://digitalcommons.chapman.edu/esi_working_papers/420/

Copyright

The authors