self-regarding individual. Thus, broadly speaking, we can say that empathy concerns three key areas: (i) game theory and the common knowledge assumption, (ii) welfare economics and interpersonal utility comparisons, and (iii) behavioural economics/neuroeconomics, testing on the one hand how people can come to know about the preferences of others and on the other investigating the idea that other-regarding preferences may or may not lead to non-selfish behaviour. The ‘third’ economic area of empathy, behavioural and neuroeconomics, is of course a particularly interesting field of research since it combines economic theory with results from neuroscientific research and, in that sense, promises to make substantial contributions to the other two areas in which empathy enters into economics, i.e. game theory and welfare economics. In addition, some neuroeconomists are eager to show the existence of other-regarding preferences as explained above. Before proceeding it is worth making a cautionary remark. Some economists (see Gul & Pesendorfer 2008) have argued that this field has little or nothing to tell us about the nature of economic decision-making. Furthermore, the existence, relevance and importance of other-regarding preferences are currently quite a contentious domain in economics (Binmore & Shaked in press a , b ). If we assume such preferences do exist, then the next important issue for an economist to clarify is the stability and distribution of other-regarding preferences. The question is, are there any particular ‘other-regarding preference types’ in the population? Some neuroscientific experiments have been claimed to show that there exists a heterogeneous expression of empathy across experimental subjects ( Singer et al . 2006 ). The idea is that each person is endowed with a certain degree of empathy or other-regarding preference. This could therefore be translated into a particular distribution of other-regarding behaviour based on these intrinsic other-r