Effects of a Management–Labor Context and Team Play on Ultimatum Game Outcomes

Laboratory experiments are usually done on individuals, but many business decisions involve groups. Therefore, we ran ultimatum games using individuals and two‐person teams. We primed business roles with the labels “labor” and “management,” or we used the generic labels of “proposer” and “responder.” With business labels, individuals offered lower shares at higher stakes with no significant differences in acceptance rates. For teams, business labels had no significant effect on shares offered, with significantly lower acceptance rates at higher stakes. Teams offered less than individuals, along with higher acceptance rates with generic labels, compared to no significant differences with business labels.     

Sally H. Clarke. Trust and Power: Consumers, the Modern Corporation, and the Making of the United States Automobile Market

Buying a car, the old adage tells us, is "the most importantpurchase you will ever make, after your home." Sally Clarkehas written an extremely important and insightful book thatexplores the never-ending tug-of-war between companies, consumers,and the state to define the parameters of America's most importantmarket. At the core of this broad, longitudinal study, is thesimple yet elegant notion that the marketplace, and the relationshipbetween consumers and firms, shapes not only the organization     

Evolution of vulnerability to pain in interpersonal relations as a strategic trait aiding cooperation

Why are humans so vulnerable to pain in interpersonal relations and can so easily hurt others physically and emotionally? We theoretically examine whether being offensively strong but defensively weak can evolve as a strategic trait that fosters cooperation. We study a population comprised of “thick-skinned” and “thin-skinned” agents by using an indirect evolution model that combines rational choice in strategic interactions with evolutionary selection across generations. We find that (a) the relatively vulnerable and cooperative thin-skins cannot evolve under purely random matching, (b) with some assortment thin-skins evolve and can take over the entire population, (c) vulnerability to greater pain makes it easier for thin-skins to evolve, and (d) proximate pain which merely feels bad but does not lower fitness helps thin-skins evolve even more than pain which accurately reflects fitness consequences. We draw contrast with the Hawk-Dove model and identify several ways in which rationality hinders the evolution of the relatively vulnerable and peaceful type of agent.     

Labor-Leisure Choice and Relative Income Concerns in the Shadow of the Housing Market

We theoretically examine the connection among labor productivity, work time, and housing costs in an economy with households differing in wages and neighborhoods differing in quality. We argue that the location rent component of housing cost is key to explicating the connection. We trace how the housing market makes relative income instrumental for maximizing utility even if households’ utility functions are not interdependent. Over time, productivity growth yields higher wages but households compete some of that away on the housing market. This structural inflation of location rents counteracts preferences to work less as wages rise and hinders the expansion of leisure. Relative income effects are shown to arise as a consequence of a market institution that monetizes socially-imbued preferences.