The principal focus in the substantial literature on impediments to economic development has been on the inadequacies of policies and governance. However, successful economic development requires effectiveness of markets and incentives for investment, which in turn require trust. This paper...

We analyse interethnic cooperation in an infinitely repeated prisoner’s dilemma when members of one group are unable to target punishment towards individual defectors from the other group. We first show that indiscriminate outgroup punishment may sustain cooperation in this setting. Our main...

Abstract: This essay makes a conceptual distinction between societal categories, such as social networks, norms, and social status differentiation, on the one hand, and social capital, on the other. The former are institutional phenomena arising as outcomes of social-exchange games in which...

Data from three bargaining games - the Dictator Game, the Ultimatum Game, and the Third-Party Punishment Game - played in 15 societies are presented. The societies range from US undergraduates to Amazonian, Arctic, and African hunter-gatherers. Behaviour within the games varies markedly across...

Monitoring by peers is often an effective means of attenuating incentive problems. Most explanations of the efficacy of mutual monitoring rely either on small group size or on a version of the Folk theorem with repeated interactions which requires reasonably accurate public information...

This paper investigates how group membership and competition among trustors interact with trust and trustworthiness in a laboratory one-shot trust game. To analyze these effects, we apply a 2x2 design. We induce group membership by letting subjects play coordination games with clear focal...

Psychological game theory can provide a rational choice explanation of framing effects; frames influence beliefs, and beliefs influence motivations. We explain this point theoretically, and explore its empirical relevance experimentally. In a 2×2-factorial framing design of one-shot public good...

This paper provides an argument for the advantage of a preference for identity-consistent behaviour from an evolutionary point of view. Within a stylised model of social interaction, we show that the development of cooperative social norms is greatly facilitated if the agents of the society...

We define social reciprocity as the act of demonstrating one's disapproval, at some personal cost, for the violation of widely-held norms (e.g., don't free ride). Social reciprocity differs from standard notions of reciprocity because social reciprocators intervene whenever a norm is violated...

Psychological game theory can help provide a rational choice explanation of framing effects; frames influence beliefs, beliefs influence motivations. We explain this theoretically, and explore the empirical relevance experimentally. In a 2×2 design of one-shot public good games we show that...