Recent research has shown the usefulness of social preferences for explaining behavior in laboratory experiments. This paper demonstrates that models of social preferences are particularly powerful in explaining behavior if they are embedded in a setting of heterogeneous actors with...

This note analyzes the Bertrand duopoly with constant but asymmetric marginal costs on a market with homogenous products. It is shown that there exist some equilibria that are ignored in the literature on IO. In addition, in this setting (perfectly or nearly perfectly) competitive equilibria exist.