In this paper we offer a new theory of religion. Our theory relies on the assumption that individuals in society have different beliefs about the relation between their actions and the utility they gain in a strategic social interaction (specifically, a Prisoner's Dilemma). This heterogeneity of...

In this paper, we extend the cheap talk model of Crawford and Sobel (1982) to a multidimensional state space. We provide a characterization of informative equilibria. Most importantly, we prove for a generic family of distribution functions, that no information transmission is feasible when the...

This paper uses a new data set on domestic child adoption to document the preferences of potential adoptive parents over born and unborn babies relinquished for adoption by their birth mothers. We show that adoptive parents exhibit significant biases in favor of girls and against...

We then consider the group of peers (or friends) as an object of choice. We characterize the peer group's optimal composition for each individual in the population. We show that, for each individual, there is a large equivalence class of optimal groups, potentially with maximal variance of...

This paper offers a model to study the trade-off between the efficiency enhancements of information exchanges and the risk of information leakage in organizations. Information exchanges can be efficient since, in the absence of legal enforcement, the voluntary disclosure of personal information...