Lending to the poor is expensive due to high screening, monitoring, and enforcement costs. Group lending advocates believe lenders overcome this by harnessing social connections. Using data from FINCA-Peru, I exploit a quasi-random group formation process to find evidence of peers successfully monitoring and enforcing joint-liability loans. Individuals with stronger social connections to their ...

There is strong evidence that people exploit their bargaining power in competitive markets but not in bilateral bargaining situations. There is also strong evidence that people exploit free-riding opportunities in voluntary cooperation games. Yet, when they are given the opportunity to punish free-riders, stable cooperation is maintained although punishment is costly for those who punish. This ...

In cases where uninvolved bystanders pay to punish defectors, this behavior has typically been interpreted in terms of group-level rather than individual-level benefits. Male cleaner fish, Labroides dimidiatus, punish their female partner if she cheats while inspecting model clients. Punishment promotes female cooperation and thereby yields direct foraging benefits to the male. Thus, third-part...

Our research is a variant of the third party punishment game that we call Solomon’s Game. The main feature of this game is that players can not only punish unfair people but also help those individuals who are the victims of that unfairness. The aim of this experiment is to compare the human tendency to punish unfair behavior to the desire to help victims of that unfairness, in presence of a bu...

In this paper, we use the ‘favour game’ as developed in Harris et al (2009) to examine the nature of social norms regarding in-group favouritism behaviour. In the favour game, a decision-maker has to decide only once how to allocate a fixed amount of resource between each of the three members of her own group and each of the three members of the out-group, whilst the decision-maker’s own payoff...