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Mohamed Ariff and Shamsher Mohamad
Adam Smith traced the source of opulence of nation, which he called capital, to the uninterrupted efforts of every man to better his condition. Today we define wealth as the item that has some economic substance, a value such that this wealth can be used for several intended purposes, in modern economics, for consumption as theoretically glorified by the Utility Maximization Theorem (Arrow-Debreu). In this chapter, the reader is introduced to the modern idea of net wealth held by households and entities. The amount of wealth as at 2017 is given as US$ 250 trillion after all liabilities are subtracted from total wealth. In this context, Calvin’s contribution of wealth as God’s gift to man is referred to, which provides a continuity with Islam’s claim that wealth belongs to God, and He apportions who begets it.
Edited by M. Kabir Hassan
M. Kabir Hassan
Anwar Shah, Karim Khan and Hayat Khan
The mainstream economic theory assumes that individuals’ preferences are exogenous and self-regarding. However, the laboratory experiments show that in most of the cases, individuals’ preferences exhibit regard for others. It is widely believed that values and norms can foster the other-regarding behaviour by constraining selfishness. This does not imply that selfish behaviour is dead as there is enough experimental evidence that other-regarding individuals use information asymmetry for their personal gains. In this study, while controlling for one aspect of values, that is, religion, we investigate whether individuals behave significantly differently when we control for their religiosity. We examine the behaviours of proposers in a modified ultimatum game after priming their religious identity. Using hadith, saying of the Holy Prophet Muhammad Peace Be Upon Him (PBUH), as a priming instrument, we find that most of the proposers make equitable offers to the responders as compared to the controlled treatment. This is in spite of the fact that the proposers could use information asymmetry regarding the size of the pie for maximizing their private gains. The study suggests that promoting universal values can be beneficial for the promotion of pro-social or other-regarding behaviour.