This Paper presents a formal theory of reciprocity. Reciprocity means that people reward kind actions and punish unkind … ones. The theory takes into account that people evaluate the kindness of an action not only by its consequences but also by … the intention underlying this action. The theory explains the relevant stylized facts of a wide range of experimental …

discrimination - or rebates, explicit price discrimination) and show that the schemes which - for given market structure - induce a …

coordination when markets price sovereign default risk, and put pressure on governments for implementing budget consolidation …

Motivated the European debt crisis, we construct a tractable theory of sovereign debt and structural reforms under … one-period debt and can renege on its obligations by suffering a stochastic default cost. When faced with a credible … default threat, creditors can make a take-it-or-leave-it debt haircut offer to the sovereign. The risk of renegotiation is …