In models of sequential decision making herd behaviour occurs if the signals smart(dumb) agents receive are (un)correlated and if agents have reputational concerns. We show thatintroducing costly effort to become informed about project payoffs (i) eliminates herdbehaviour and (ii) shifts...

Decisions-makers often rely on information supplied by interested parties. In practice, some parties have easier access to information than other parties. In this light, we examine whether more powerful parties have a disproportionate influence on decisions. We show that more powerful parties...

Can vanity do any good? It may seem obvious to answer this question in the negative, as economists have shown how reputational concerns lead agents e.g. to ignore valuable information, to herd, and to become overly risk averse. We explore how proud agents may be a social blessing. An agent may...

This discussion paper led to a publication in the 'Journal of Law, Economics & Organization', 2004, 20, 353-378.<P> This paper is concerned with the role of committees in collective decision-makingprocesses in a world where agents must be motivated to collect information. Committees improvethe...</p>

This discussion paper led to a publication in the 'Journal of Law, Economics & Organization', 2004, 20, 353-378.<P> This paper is concerned with the role of committees in collective decision-makingprocesses in a world where agents must be motivated to collect information. Committees improvethe...</p>

The collection of information necessary fordecision-making is often delegated to agents (e.g. bureaucrats,advisors, lawyers). If both the pros and cons of a decision haveto be examined, it is better to use competing agents instead of asingle agent. The reason is that two conflicting pieces...

A well-known rationale for representative democracy is that direct democracy leads to a free-rider problem as to the collection of information. A problem with this rationale is that it takes for granted that representatives collect information. In this paper we examine whether or not electoral...

Recent empirical evidence suggests that financial networks exhibit a core periphery network structure. This paper aims at giving an economic explanation for the emergence of such a structure using network formation theory. Focusing on intermediation benefits, we find that a core periphery...

What determines remittances – altruism or enlightened self-interest - and do remittances trigger additional migration? These two questions are examined empirically in Egypt, Turkey and Morocco for households with family members living abroad. Results show, first, that one cannot clearly...