The favorite-longshot bias describes the longstanding empirical regularity that betting odds provide biased estimates of the probability of a horse winning--longshots are overbet, while favorites are underbet. Neoclassical explanations of this phenomenon focus on rational gamblers who overbet...

Deferred Acceptance (DA), a widely implemented algorithm, is meant to improve allocations: under classical preferences, it induces preference-concordant rankings. However, recent evidence shows that—in both real, large-stakes applications and experiments—participants frequently play...

The literature on voluntary provision of public goods includes recent theoretical work on the formation of voluntary coalitions to provide public goods. Theory is ambiguous on the equilibrium coalition size and contribution rates. We examine the emergence of coalitions, their size, and how...

This paper examines reputation formation in intra-familial interactions. We consider parental reputation in a repeated two-stage game in which adolescents decide whether to give a teen birth or drop out of high school, and given adolescent decisions, the parent decides whether to house and...

Two heterogeneous agents contribute over time to a joint project, and collectively decide its scope. A larger scope requires greater cumulative effort and delivers higher benefits upon completion. We show that the efficient agent prefers a smaller scope, and preferences are time-inconsistent: as...

Domestic attempts to use financial incentives for teachers to increase student achievement have been ineffective. In this paper, we demonstrate that exploiting the power of loss aversion--teachers are paid in advance and asked to give back the money if their students do not improve...

We document that prior portfolio choices influence investors' expectations about asset values, and their future choices. We find that people update more from information consistent with their prior choices, leading to sticky portfolios over time. These effects are related to how the brain's...