In this paper, we incorporate the concept of fairness in a conventional dyadic channel to investigate how fairness may affect channel coordination. We show that when channel members are concerned about fairness, the manufacturer can use a simple wholesale price above its marginal cost to...

We present a model of boundedly rational play in single-shot 2 × 2 games. Players choose strategies based on the perceived salience of their own payoffs and, if own-payoff salience is uninformative, on the perceived salience of their opponent's payoffs. When own payoffs are salient, the model's...

Social norms permeate society across a wide range of issues and are important to understanding how societies function. In this paper we concentrate on 'bad' social norms - those that are inefficient or even damaging to a group. This paper explains how bad social norms evolve and persist; our...

In mainstream economics individuals are supposed to be driven only by their self-interest. By contrast, surveys clearly show that people do care about fairness in their demand for redistribution. In this article, in the spirit of the "new synthesis" in moral psychology (Haidt, 2007: The new...

A pervasive feature in the finance industry is relative performance, which can include extrinsic (money), intrinsic (self-image), and reputational (status) motives. In this paper, we model a portfolio decision with two assets and investigate how reputational motives (i.e., the public...