This Paper studies the internal commitment mechanisms or ‘personal rules’ (diets, exercise regimens, resolutions, moral or religious precepts, etc.) through which people seek to achieve self-control. Our theory is based on the idea of self-reputation over one’s willpower, which potentially...

We build a theory of prosocial behaviour that combines heterogeneity in individual altruism and greed with concerns for social reputation or self-respect. The presence of rewards or punishments creates doubt as to the true motive for which good deeds are performed, and this ‘overjustification...

This paper analyzes how private decisions and public policies are shaped by personal and societal preferences (values), material or other explicit incentives (laws) and social sanctions or rewards (norms). It first examines how honor, stigma and social norms arise from individuals’ behaviors...

This paper considers a housing insurance market in which buildings have different damage probabilities. Insurers use imperfect tests to find out about buildings’ damage types. The insurance market is a natural monopoly. If more than one insurer is active, high risk house owners continue to...

When banks have an informational monopoly about their borrowers, the latter incentives can be thwarted by the fear that the return on their effort will be partly appropriated by their banks via high future interest rates. Banks can correct this incentive problem through a commitment to share...

We show that the when one takes into account the global equilibrium ramifications of an unwinding of the US current account deficit, currently running at more than 6% of GDP, the potential collapse of the dollar becomes considerably larger than our previous estimates (Obstfeld and Rogoff 2000a)...