We develop a simple model that describes individuals’ self-assessments oftheir abilities. We assume that individuals learn about their abilities from appraisalsof others and experience. Our model predicts that if communicationis imperfect, then (i) appraisals of others tend to be too positive,...

This article analyzes under which conditions a manager can motivate a junior worker by verbal communication, and explains why communication is often tied up with organizational choices as job enlargement and collaboration. Our model has two important features. First, the manager has more...

We analyze a simple model of local public good provision in a country consisting of a large number of heterogeneous regions, each comprising two districts, a city and a village. When districts remain autonomous and local public goods have positive spillover effects on the neighbouring district,...

A firm may induce voters or elected politicians to support a policy it favors by suggesting that it is more likely to invest in a district whose voters or representatives support the policy. In equilibrium, no one vote may be decisive, and the policy may gain strong support though the majority...

This paper develops one possible argument why auctioning licenses to op-erate in an aftermarket may lead to higher prices in the aftermarket comparedto a more random allocation mechanism. Key ingredients in the argumentare differences in firms' risk attitudes and the fact that future market...