Common identity and peer punishment have been identified as important means to reduce free riding and to promote cooperation in teamwork settings. This paper examines the relative importance of these two mechanisms, as well as the importance of income distribution in team cooperation. In a...

We analyze optimal social discount rates when people derive utility from relative consumption. We compare the social, private, and conventional Ramsey rates. Assuming a positive growth rate, we find that 1) the social discount rate exceeds the private discount rate if the importance of relative...

We show that peer sanctioning increases cooperation in public goods experiments more in unequally endowed groups than in equally endowed groups. Punishment results in a redistribution of wealth from high to low endowment players within groups. <p>

We explore the effect of income inequality and peer punishment on voluntary provision of public goods in an experimental context. Our sample draws from nine fishing communities in South-Africa where high levels of inequality prevail. We find that aggregate cooperation is higher in both the...

Although conventional economic theory proposes that only the absolute levels of income and consumption matter for people’s utility, there is much evidence that relative concerns are often important. This paper uses a survey-experimental method to measure people’s perceptions of the degree to...

A theoretical model of the ethical preferences of individuals is tested by conducting a choice experiment on safety-enhancing road investments. The relative value of a saved life is found to decrease with age, such that the present value of a saved year of life is almost independent of age at a...