Users of the social networking service Facebook have the possibility to post status updates for their friends to read. In turn, friends may react to these short messages by writing comments or by pressing a Like button to show their appreciation. Making use of five Swedish accounts, we set up a...

This paper introduces an experimental economy with boundedly rational agents that compete with local, and largely incommunicable industrial knowledge, in an international market environment with more or less unbounded, commercial opportunities. Predictability of outcomes at the micro level is...

The dynamics of self-confidence are modelled in an environment where rational individuals optimally choose educations and occupations with the aim to acquire productive skills while learning about ability. It is shown how the presence of uninformative options can trap individuals below their...

No abstract.

Why do so many high-priced acquisitions of entrepreneurial firms take place in network industries? We develop a theory of commercialization (entry or sale) in network industries showing that high equilibrium acquisition prices are driven by the incumbents' desire to prevent rivals from acquiring...

We test whether people’s tendency to stick with the default option can help save resources. In a natural field experiment we switch printers’ default settings, from simplex to duplex printing, at a large Swedish university. The results confirm that roughly one third of all printing is...

We propose a spatial search-matching model where both job creation and job destruction are endogenous. Workers are ex ante identical but not ex post since their job can be hit by a technological shock, which decreases their productivity. They reside in a city and commuting to the job center...

The Todaro Paradox states that policies aimed at reducing urban unemployment are bound to backfire: they will raise rather than reduce urban unemployment. The aim of this paper is to reexamine this paradox in the context of efficiency wage and search-matching models. For that, we study a policy...

No abstract.

This paper reviews a growing literature investigating how economic agents may learn rational expectations. Fully rational learning requires implausible initial information assumptions, therefore some form of bounded rationality has come into focus. Such learning models often converge to rational...