We develop a novel argument why better public information can help countries to insure against idiosyncratic risk. Representative agents of developing and industrial countries receive public and private signals on their future income realization and engage in risk-sharing contracts with limited...

We study social learning in a social network setting where agents receive independent noisy signals about the truth. Agents naïvely update beliefs by repeatedly taking weighted averages of neighbors' opinions. The weights are fixed in the sense of representing average frequency and intensity of...

We empirically evaluate a behavioural model with boundedly rational traders who disagree about the persistence of deviations from the fundamental stock price. Fundamentalist traders believe in mean-reversion, while chartists extrapolate trends. Agents gradually switch between the two rules,...