Studying evolutionarily successful behavior we show in a general framework that when individuals maximizing payoff differentials invest resources in punishing others. Interestingly, these investments are increasing in individuals, own wealth and decreasing in the wealth of others.

We introduce a generalized theoretical approach to study imitation models and subject themodels to rigorous experimental testing. In our theoretical analysis we find that the differentpredictions of previous imitation models are due to different informational assumptions, notto different...

Human cooperation has been explained through rationality as well as heuristics-based models. Both model classes share the feature that knowledge of payoff functions is weakly beneficial for the emergence of cooperation. Here, we present experimental evidence to the contrary. We let human...

This paper examines the relationship between firms? wage offers and workers? supply of effort using a three-period experiment. In equilibrium, firms will offer deferred compensation: first period productivity is positive and wages are zero, while third period productivity is zero and wages are...