This thesis is designed as a contribution to the economics of social interaction with a focus on human emotions and thinking processes. The first two chapters are empirical and the third chapter is theoretical. Chapter one examines the extent to which punishments are motivated by the emotion of anger or ‘fairness’ considerations. A laboratory experiment uses a multi-round game where the punisher could not be sure whether a selfish action of the punished may be ‘excused’ or not. The results show that subjects tend to inflict a harsher punishment as the proportion of observed selfish actions in previous rounds increases, after controlling for the current action. The data can further test competing hypotheses of two theories: norm compliance and spitefulness. One third of subjects punish an action that fails to comply with the norm, but none habitually punish a spiteful person regardless of the current action. Chapter two investigates whether the individual tendency to think intuitively or deliberately can lead to altruistic giving or punishment. An online experiment uses a 40-item self-report questionnaire to measure individual reliance on intuitive feelings (Faith in Intuition) and personal tendency to engage in deliberate thinking (Need for Cognition). The results show that people who tend to think more deliberately are less prone to punish. An increase in the cost of punishing reduces both punishment and giving. High reliance on intuition is associated with greater sensitivity of punishment to a cost increase than to a cost decrease, which might be explained by loss aversion. Chapter three develops a model of interdependent preferences in the presence of asymmetric information. The model explores the welfare consequences of permitting divorce. Suppose each player has a private value of the marriage and may or may not care about the partner’s value. When divorce is possible, any player can use the threat of divorce to make demands on the other player, but it might also reveal one’s own value of the marriage. A well-known theoretical result is that asymmetric information routinely leads to inefficient bargaining and divorce, but this model further shows that incorporating interdependent preferences can eliminate such inefficiencies. Thus, asymmetric information is not a sufficient condition for inefficient divorce; the lack of care about the partner is also necessary.