Trust affects almost all human relationships - in families, organizations, markets and politics. However, identifying the conditions under which trust, defined as people's beliefs in the trustworthiness of others, has a causal effect on the efficiency of human interactions has proven to be...

Under weak contract enforcement the trading parties' trust, defined as their belief in other's trustworthiness, appears important for realizing gains from trade. In contrast, under strong contract enforcement beliefs about other's trustworthiness appear less important, suggesting that trust and...

The widespread use of markets leads to unprecedented material well-being in many societies. We study whether market interaction, as a side effect, erodes moral values. In an influential paper, Falk and Szech (2013) provide experimental data that seem to suggest that "market interaction erodes...

Under weak contract enforcement the trading parties' trust, defined as their belief in other's trustworthiness, appears important for realizing gains from trade. In contrast, under strong contract enforcement beliefs about other's trustworthiness appear less important, suggesting that trust and...

Transitivity is perhaps the most fundamental choice axiom and, therefore, almost all economic models assume that preferences are transitive. The empirical literature has regularly documented violations of transitivity, but these violations pose little problem as long as they are simply a result...

Transitivity is perhaps the most fundamental choice axiom and, therefore, almost all economic models assume that preferences are transitive. The empirical literature has regularly documented violations of transitivity, but these violations pose little problem as long as they are simply a result...