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  • Vernon L. Smith (a1) and Bart J. Wilson (a1)

In this essay we provide a brief account and interpretation of The Theory of Moral Sentiments showing that it departs fundamentally from contemporary patterns of thought in economics that are believed to govern individual behavior in small groups, and contains strong testable propositions governing the expression of that behavior. We also state a formal representation of the model for individual choice of action, apply the propositions to the prediction of actions in trust games, report two experiments testing these predictions, and interpret the results in terms directly related to the model. In short, we argue that the system of sociability developed by Adam Smith provides a coherent non-utilitarian model that is consistent with the pattern of results in trust games, and leads to testable new predictions, some of which we test.

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Joyce Berg , John Dickhaut , and Kevin McCabe , “Trust, Reciprocity, and Social History,” Games and Economic Behavior 10 (1995): 122–42.

Werner Güth , Rolf Schmittberger , and Bernd Schwarze , “An Experimental Analysis of Ultimatum Bargaining,” Journal of Economic Behavior and Organization 3, no. 4 (1982): 367–88.

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Elizabeth Hoffman , Kevin A. McCabe , and Vernon L. Smith , “Behavioral Foundations of Reciprocity: Experimental Economics and Evolutionary Psychology,” Economic Inquiry 36, no. 3 (1998): 335–52.

Ernst Fehr and Bettina Rockenbach , “Detrimental Effects of Sanctions on Human Altruism,” Nature 422 (2003): 137140.

Vernon L. Smith , “Theory and Experiment: What Are the Questions?” Journal of Economic Behavior and Organization 73, no. 1 (2010): 59.

James C. Cox , Daniel Friedman , and Steven Gjerstad , “A Tractable Model of Reciprocity,” Games and Economic Behavior 59 (2007): 1745.

Deirdre N. McCloskey , The Bourgeois Virtues: Ethics for an Age of Commerce (Chicago: University of Chicago Press, 2006).

Vernon L. Smith and Bart J. Wilson , “Fair and Impartial Spectators in Experimental Economic Behavior,” Review of Behavioral Economics 1, no. 1 (2014): 126.

Bart J. Wilson , “Social Preferences Aren’t Preferences,” Journal of Economic Behavior and Organization 73, no. 1 (2010): 7782.

Bart J. Wilson , “Contra Private Fairness,” American Journal of Economics and Sociology 71, no. 2 (2012): 407435.

James C. Cox and Cary A. Deck , “On the Nature of Reciprocal Motives,” Economic Inquiry 43 (2005): 623–35.

Kevin McCabe , Vernon L. Smith , and Michael LePore , “Intentionality Detection and ‘Mindreading’: Why Does Game Form Matter,” Proceedings of the National Academy of Sciences 97, no. 8 (2000): 44044409.

Bart J. Wilson , “Language Games of Reciprocity” Journal of Economic Behavior and Organization 68, no. 2 (2008): 365–77.

Frank H. Knight , “Economic Psychology and the Value Problem,” Quarterly Journal of Economics 39, no. 3 (1925): 372409.

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Social Philosophy and Policy
  • ISSN: 0265-0525
  • EISSN: 1471-6437
  • URL: /core/journals/social-philosophy-and-policy
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