Introducing the concept of “belief entrepreneur”, this paper offers a novel framework of endogenous belief formation under fundamental uncertainty. We consider a generic setup in which individuals must choose between a tested approach (supplied by a “defender”) and a competing innovative...

A large informal sector and widespread poverty are often regarded as two closely intertwined problems. This paper explores how informality and poverty respond to different options for regulatory and policy reform. To do so, we propose a structural model and calibrate it to survey data from...