This paper provides a unified explanation for why blacks commit more crime, are located in poorer neighborhoods and receive lower wages than whites. If everybody believes that blacks are more criminal than whites - even if there is no basis for this - then blacks are offered lower wages and, as...

We analyze an oligopoly model in which differentiated criminal organizations globally compete on criminal activities and engage in local corruption to avoid punishment. When law enforcers are sufficiently well-paid, difficult to bribe and corruption detection highly probable, we show that...

This paper analyses the interplay between social structure and information exchange in two competing activities, crime and labor. We consider a dynamic model in which individuals belong to mutually exclusive two-person groups, referred to as dyads. Two individuals belonging to the same dyad hold...

We develop a dynamic model of identity formation that explains why ethnic minorities may choose to adopt oppositional identities (i.e. some individuals may reject or not the dominant culture) and why this behavior may persist over time. We first show that the prevalence of an oppositional...