TY  - SER
AU  - Jiang, Janet Hua
AU  -  Norman, Peter
AU  -  Puzzello, Daniela
AU  -  Sultanum, Bruno
AU  -  Wright, Randall
TI  - Is Money Essential? An Experimental Approach
SN  - 0022-3808
PB  - Journal of Political Economy
KW  -  Monetary Equilibrium
KW  -  Monetary Exchange
KW  -  Monetary Models
KW  - Money
N2  - Monetary exchange is called essential when better outcomes become incentive compatible when money is introduced. We study essentiality theoretically and experimentally using finite-horizon monetary models that are naturally suited to the lab. Following mechanism design, we also study the effects of strategy recommendations both when they are incentive compatible and when they are not. Results show that output and welfare are significantly enhanced by fiat currency if monetary equilibrium exists but not otherwise. Also, recommendations help if incentive compatible but not otherwise. Sometimes money gets used when it should not, and we investigate why, using surveys and measures of social preferences
UR  - https://www.journals.uchicago.edu/doi/10.1086/730199
ER  -