Payoff heterogeneity weakens positive feedback in binary choice models in two ways. First, heterogeneity drives individuals to corners where they are unaffected by strategic complementarities. Second, aggregate behaviour is smoother than individual behaviour when individuals are heterogeneous....

The results demonstrated in this chapter quite clearly the impact of property rights on the shared expectations about appropriate proposer behavior in both ultimatum and dictator games. If the game is presented as division (which by one definition means literally to separate into equal parts by...

The Nash equilibrium is a widely used concept in Economics and in many other (social) sciences. However, in several situations it does not seem to accurately predict behavior. Often the equilibrium prediction is based on the players’ own (observable) material payoffs, which do not necessarily...

We provide a direct test of the role of social preferences and beliefs in voluntary cooperation and its decline. We elicit individuals cooperation preference in one experiment and use them as well as subjects elicited beliefs to make predictions about contributions to a public good played...

We provide an evolutionary foundation to evidence that in some situations humans maintain optimistic or pessimistic attitudes towards uncertainty and are ignorant to relevant aspects of the environment. Players in strategic games face Knightian uncertainty about opponents' actions and maximize...