The existence of cooperation and social order among genetically unrelated individuals is a fundamental problem in the behavioural sciences. The prevailing approaches in biology and economics view cooperation exclusively as self-interested behaviour— unrelated individuals cooperate only if they...

Social Norms are a pervasive phenomenon in social and economic life. They have important economic consequences and constitute powerful social constraints on individual behaviour beyond the legal constraints and the market constraints usually considered by economists. This paper presents a simple...

Several studies indicate that firms are reluctant to cut nominal wages during periods of relatively high nominal per capita GDP growth. It has been argued, however, that in an environment with a low nominal per capita GDP growth, i.e., when nominal wage cuts become customary, firms would no...

We provide evidence that long-term relationships between trading parties emerge endogenously in the absence of third party enforcement of contracts and are associated with a fundamental change in the nature of market interactions. Without third party enforcement, the vast majority of trades are...

This paper discusses recent neuroeconomic evidence related to other-regarding behaviors and the decision to trust in other people’s other-regarding behavior. This evidence supports the view that people derive nonpecuniary utility (i) from mutual cooperation in social dilemma (SD) games and...

In many occupations workers’ labor supply choices are constrained by institutional rules regulating labor time and effort provision. This renders explicit tests of the neoclassical theory of labor supply difficult. Here we present evidence from studies examining labor supply responses in...