In this article we provide a brief account and interpretation of The Theory of Moral Sentiments showing that it departs fundamentally from contemporary patterns of thought in economics that are believed to govern individual behavior in small groups, and contains strong testable propositions...

One robust result in experimental economics is the failure to observe equilibrium play in the ultimatum game. A heretofore unnoticed feature of the game is that neither player voluntarily chooses to play the game. Motivated by Adam Smith's proposition that beneficence — like that of...

In this paper we study the performance of an economic environment that can support specialization if the participants implement and develop some system of exchange. We define a closed economy in which the participants must discover the ability to exchange, implement it, and ascertain what they...

While neo-classical analysis works well for studying impersonal exchange in markets, it fails to explain why people conduct themselves the way they do in their personal relationships with family, neighbors, and friends. In Humanomics, Nobel Prize-winning economist Vernon L. Smith and his...

Our primary purpose in this article is to draw upon the literature of classical liberal economy to show how it informs and is informed by the results from experimental economics. Adam Smith's first great book, <italic>The Theory of Moral Sentiments</italic>, serves as our chief source of insights for...