We review the vast literature on social preferences by assessing what is known about their fundamental properties, their distribution in the broader population, and their consequences for important economic and political behaviors. We provide, in particular, an overview of the empirically...

Considerable experimental evidence suggests that non-pecuniary motives must be addressed when modeling behavior in economic contexts. Recent models of non-pecuniary motives can be classified as either altruism- based, equity-based, or reciprocity-based. We estimate and compare leading approaches...

While papers such as Akerlof and Yellen (1990) and Rabin (1993) argue that psychological considerations such as fairness and reciprocity are important in individual decision-making, there is little explicit empirical evidence of reciprocal altruism in economic environments. This paper tests...

We use a two-person 3-stage game to investigate whether people choose to punish or reward another player by sacrificing money to increase or decrease the other person's payoff. One player sends a message indicating an intended play, which is either favorable or unfavorable to the other player in...

We examine, experimentally and theoretically, how communication within a partnership may mitigate the problem (highlighted in contract theory) of hidden action. What is the form and content of the communication? Which model of decision-making can capture the impact of communication? We consider...

We assess the role of anti-social personality traits in explaining heterogeneity in commonly observed social preferences. We identified a personality profile that clearly reflects anti-social personality characteristics, with high positive loadings on Machiavellianism and high negative loadings...

In recent years a large number of experimental studies have documented the existence of strong reciprocity among humans. Strong reciprocity means that people willingly repay gifts and punish the violation of cooperation and fairness norms even in anonymous one-shot encounters with genetically...

During the last two decades economists have made much progress in understanding incentives, contracts and organisations. Yet, they constrained their attention to a very narrow and empirically questionable view of human motivation. The purpose of this paper is to show that this narrow view of...

This paper investigates the driving forces behind informal sanctions in cooperation games and the extent to which theories of fairness and reciprocity capture these forces. We find that cooperators' punishment is almost exclusively targeted towards the defectors but the latter also impose a...

We study the impact of reputational incentives in markets characterized by moral hazard problems. Social preferences have been shown to enhance contract enforcement in these markets, while at the same time generating considerable wage and price rigidity. Reputation powerfully amplifies the...