The evolution of trustworthiness as a major aspect of business ethics depends crucially on whether it can be signaled. If this is impossible, only opportunistic traders will survive. Whereas previous studies have analysed detection agencies (Güth and Kliemt, 1994 and 1998) or have substituted...

Can a court system conceivably control opportunistic behavior if judges are selected from the same population as ordinary citizens and thus are no better than "the rest of us"? This paper provides a new and, as we claim, quite profound "rational choice" answer to that unsolved riddle. Adopting...

On a homogeneous oligopoly market informed sellers are fully aware of market demand whereas uninformed sellers only know the distribution. We first derive the market results when sellers are risk averse, similarly to Ponssard (1979) who assumed risk neutrality throughout. With the help of these...

We justify risk neutral equilibrium bidding in commonly known fair division games with incompleteinformation by an evolutionary setup postulating (i) minimal common knowledge, (ii) optimal responses to conjectural beliefs how others behave and (iii) evolutionary selection of conjectural beliefs...

In a market with stochastic demand at most one seller can acquire costly information about demand. Other sellers entertain idiosyncratic beliefs about the market demand and whether there exists an informed seller. These idiosyncratic beliefs co-evolve with the potential insider's inclination to...

We review theoretical and empirical research on the dynamic interactions between cultures and institutions. We think about culture as a system of values and about institutions as formalized rules of the game. Our presentation is organized around a simple theoretical framework of political...

Do political institutions shape economic policy? I argue that this question should naturally appeal to economists. Moreover, the answer is in the affirmative, both in theory and in practice. In particular, recent theoretical work predicts systematic eects of electoral rules and political regimes...