Money, privacy, anonimity: what experiments tell us

The attention paid to the role of money as a store of plivacy is increasing. In a monetmy transaction, full plivacy protection coincides with anonymity. In such situations, an empilical question arises: Is anonymity relevant in shaping the demand for money? We attempt to answer this question through laborat01Y experiments. The results show that anonymity matters and increases the overall appeal of a medium of payment, and that this effect is stronger for lisk-prone individuals. Moreover, the trade-off between the two propelTies of liquidity and retum is relatively high — to accept higher illiquidity risks, individuals require a more-than-propolTional increase in the expected retum. In general, the expeliments suggest that the future attractiveness of altemative cunencies depends on whether the three propelTies of money are mixed in a way that is consistent with the individual's preferences.