In his 2005 book, Understanding the Process of Economic Change, North offers a rough account of economic change that can be called “culturalist economics.” In his account, he attributes the change of well being of individuals to, besides technology and demographics, cultural heritage or...

The mirror-neuron system (MNS) becomes instigated when the spectator empathizes with the principal’s intention. MNS also involves imitation, where empathy is irrelevant. While the former may attenuate the principal’s emotion, the latter paradoxically reinforces it. This paper proposes a...

Let us define entrepreneurship as creativity and the evolution of novelty. Let us suppose, the main thesis of the chapter, that entrepreneurship is an action that does not differ from everyday action such as walking, driving, or chewing gum. If the definition and supposition are granted we can...

In March 2005, riots erupted in South Korea against Japan for claiming sovereignty over some rocky uninhabited islets (0.23 km2). Five weeks earlier, riots did not erupt in South Korea when North Korea proved that it has nuclear weapons. How can we explain moral outrage in one case, when the...

This paper traces temptations to biased beliefs instead of the standard approach that traces temptations to biased tastes. The proposed theory affords, in two ways, a more general framework than what is afforded by the standard approach: First, to start with biased beliefs can simultaneously...

Routines and instincts are similar in terms of function and structure: 1) With respect to function, they economize on scarce decision-making resources, such as cognitive faculties, by making actions, within limits, inflexible vis-à-vis fluctuating environmental stimuli. As inflexible patterns,...

Third-party institutions (judges, real-estate agents, referees, mediators, and arbiters) are designed to avoid mis-coordination among potential cooperators. They differ from first-party institutions (lobbyists) who act as rent-seekers in bargaining. They also differ from second-party...

According to the “relative income hypothesis,” decision makers derive positive utility from identifying with a group that performs more poorly than they do. We hypothesize that decision makers simultaneously derive negative utility from identifying with such a group. The reason is that...