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Advisor(s)
Abstract(s)
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.
Description
Keywords
Money Cooperation Reputation Generalized reciprocity Evolution
Pedagogical Context
Citation
Faeraciolli, Eduardo C...[et al.] (2025). “The devil’s dung? Money as a mechanism of generalized reciprocity in human societies”. REM Working paper series, nº 0379/2025
Publisher
ISEG - REM (Research in Economics and Mathematics)