Recent research has separately uncovered that stock ownership strongly correlates with both expectations and realizations of stock market returns, as well as with measures of financial literacy, ability or trust. This paper reconciles all, and reports new findings from a unique survey containing...

Do elementary statistics or equilibrium theory deliver any rules of thumb regarding how we should argue in debates? We suggest a framework for normative analysis of debates. In our framework, each discussant wants the audience to believe that the actual state coincides with the discussant's...

This paper considers the relationship between congruence and encompassing. Congruence is defined formally, and though it is not testable directly, it can be tested indirectly via tests of misspecification. Empirically more than one model can appear congruent, but that which encompasses its...

Does a competitive equilibrium in a matching market provide adequate incentives for investments made before the market when utility is not perfectly transferable? This paper derives a necessary and sufficient condition for equilibrium investments to maximize surplus conditional on the matching...

We report results from a sender-receiver cheap talk game, which explores whether an individual's decision to deceive is influenced by a concern for relative standing in a reference group. We show theoretically that positively biased senders, who think they are higher in the deception...

A committee is choosing from two alternatives. If required supermajority is not reached, voting is repeated indefinitely, although there is a cost of delay. Under suitable assumptions the equilibrium analysis provides a sharp prediction. The result can be interpreted as a generalization of the...

Simple majority does not reflect the intensity of voters’ preferences. This paper presents an efficient collective choice mechanism when the choice is binary and the designer may use non-trasferable punishments to persuade agents to reveal their private information. The designer faces a...

Empirical research on group lending is extensive, but without allowance for collateral to mitigate strategic default. Indeed, lack of credit access has motivated microcredit in rural areas of developing countries, where agents with collateral are very rare. As rural communities have tight-knit...

In a global context foreign direct investment (FDI) and migration substitute one another in the matching process between workers and firms. However, as labor flows can lead to the formation of business networks, migration can actually facilitate FDI in the long-run. We first present a stylized...

Estimates for the U.S. suggest that in some sectors productivity enhancing reallocation is the dominant factor in accounting for productivity growth. An open question is whether reallocation is always productivity enhancing. Specifically, in developing countries, market concentration, or...