Before embarking on a project, a principal must often rely on an agent to learn about its profitability. We model this learning as a two-armed bandit problem and highlight the interaction between learning (experimentation) and production. We derive the optimal contract for both experimentation...

How do parties motivate candidates to exert effort in closed-list elections? If each candidate's primary goal is winning a seat, then those in safe and hopeless list positions have weak incentives to campaign. We present a model in which (i) candidates care about both legislative seats and the...

We investigate overlapping contests in multi-divisional organizations in which an individual's effort simultaneously determines the outcome of several contests on different hierarchical levels. We show that individuals in smaller units are advantaged in the grand (organization-wide) contest for...

This paper develops and solves a spatiotemporal equilibrium model in which regional wages and house prices are jointly determined with location-to-location migration flows. The agent’s optimal location choice and the resultant migration process are shown to be Markovian, with the transition...

The social and the private returns to education differ when education can increase productivity, and also be used to signal productivity. We show how instrumental variables can be used to separately identify and estimate the social and private returns to education within the employer learning...

This paper studies how punishment for past offenses affects future compliance behavior and isolates deterrence effects mediated by learning. Using administrative data from speed cameras that capture the full driving histories of more than a million cars over several years, we evaluate responses...

We propose that multinational firms learn about their profitability in a particular market by observing their performance in nearby markets. We first develop a model of firm expectations formation with noisy signals from multiple markets and derive predictions on expectations formation and...

A growing literature points to the effectiveness of leveraging social interactions and nudges to spur adoption of pro-social behaviors. This study investigates a large-scale behavioral intervention designed to actively leverage social learning and peer interactions to encourage adoption of...

The adaptive learning approach has been fruitfully employed to model the formation of aggregate expectations at the macroeconomic level, as an alternative to rational expectations. This paper uses adaptive learning to understand, instead, the formation of expectations at the micro-level, by...