Money, privacy, anonymity: What do experiments tell us?

Borgonovo, Emanuele; Caselli, Stefano; Cillo, Alessandra; Masciandaro, Donato; Rabitti, Giovanni

doi:10.1016/j.jfs.2021.100934

Cited by 27 publications

(17 citation statements)

References 48 publications

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“…According to Khan et al (2004), such views do not take into account that privacy is already a factor that gives value to money. A number of behavioural experiments confirm the position that privacy and anonymity are what gives money value (Borgonovo et al (2021), Masciandaro (2018)). Masciandaro (2018) reformulates the traditional three functions of money (medium of exchange, unit of account, store of value) by defining three properties of money: a means of ensuring the advantage of liquidity, a means of preserving value as an opportunity to prevent opportunity costs, a means of accumulation and transmission of information.…”

Section: Literature Reviewmentioning

confidence: 88%

“…Most modern theories of money are more focused on the multiplicity of money, money as memory, money as a manifestation of trust in decentralized interactions (Zucker (1984), Zalizer (1994), Zanini and Migueles (2013), Borio (2019), Kocherlakota (1996Kocherlakota ( , 1998, Shin (2004, 2018), Vaz and Brown (2020)). At the same time, studies that reveal the essential conditionality of economic processes by cultural patterns also point to the importance of institutional and behavioural approaches in money analysis (Araujo (2004), Borgonovo et al (2021), Masciandaro (2018)). In addition, the emergence of the economy of privacy has shown that the behaviour of individuals in the digital world is subject to much more distortion than previously thought.…”

Section: Literature Reviewmentioning

confidence: 99%

“…From the last property of money, the preference for privacy and anonymity follows. It is based on this view of the properties of money that the behavioural experiment is constructed according to Borgonovo et al (2021). The conclusion that follows from it: economic agents attach importance to anonymity; the preference for anonymity is due to the propensity of economic agents to risks; the opportunity to give up liquidity benefits should be accompanied by a greater reward in the form of income (Borgonovo et al (2021)).…”

Section: Literature Reviewmentioning

confidence: 99%

“…It is based on this view of the properties of money that the behavioural experiment is constructed according to Borgonovo et al (2021). The conclusion that follows from it: economic agents attach importance to anonymity; the preference for anonymity is due to the propensity of economic agents to risks; the opportunity to give up liquidity benefits should be accompanied by a greater reward in the form of income (Borgonovo et al (2021)). It is also concluded that the combination of advantages in terms of liquidity, anonymity and prevention of opportunity costs is extremely sensitive to individual preferences (Borgonovo et al (2021), Masciandaro (2018)).…”

Section: Literature Reviewmentioning

confidence: 99%

“…The conclusion that follows from it: economic agents attach importance to anonymity; the preference for anonymity is due to the propensity of economic agents to risks; the opportunity to give up liquidity benefits should be accompanied by a greater reward in the form of income (Borgonovo et al (2021)). It is also concluded that the combination of advantages in terms of liquidity, anonymity and prevention of opportunity costs is extremely sensitive to individual preferences (Borgonovo et al (2021), Masciandaro (2018)). The results of this behavioural experiment confirm the validity of the approach according to which the preference for privacy and anonymity as the value of money can be based on cultural attitudes.…”

Section: Literature Reviewmentioning

confidence: 99%

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Does it Matter for CBDC Design? Privacy-Anonymity Preferences from the Side of Hierarchies and Egalitarian Cultural Patterns

Козюк

Ivashuk

2022

Economics

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Evolution of digital money demonstrates that CBDC (Central Bank Digital Currency means a digital form of traditional fiat currencies) design is really challenging. While technically possible CBDC solutions are visible, much of institutional aspects are rest to be unsolved. One of the issues is a degree of privacy and anonymity. All historical forms of money had intrinsic property of non-traceability of transactions and only now this feature of non-digital money is recognized as strong institutional advance. At the same time, privacy and anonymity preferences could relate to cultural attitudes. However, money may distort expected logical relations between such patterns like “less hierarchies more privacy-anonymity” or “more egalitarianism less privacy-anonymity”. This potentially means that money may posit extra propensity to privacy-anonymity that is going beyond the cultural attitudes. Basing on the survey, we demonstrate some contradictions in how respondents perceive the preference of functional usability over anonymity of transactions. The same is relevant when cultural patterns are taken into account. It is more likely to find cultural closeness across respondents from different regions than strong determinacy of privacy-anonymity preferences by propensity to hierarchies or egalitarianism. Additionally, we checked hierarchies or egalitarianism attitudes by additional questions and found some mixed results. Also, we found some conformism culture (meaning unstable preferences) and rely it with lack of trust in public institutions. When centralized money are less trusted people faster agree to sacrifice anonymity in the benefits of functionality. The main take away is that it is unlikely to expect the unity of optimal CBDC design across countries. Aside of behavioural distortions, culture still matter and it is likely to expect future variety of digital money from functional usability privacy-anonymity trade-off.

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Section: Literature Reviewmentioning

confidence: 88%