I study endogenous network formation in an environment in which individuals want to forecast a stochastic state and it is costly for them to communicate with others to exchange some exogenously observed information. Due to the existence of information complementarities, individuals' preferences...

Can artificial intelligence, in particular, machine learning algorithms, replace the idea of simple rules, such as first possession and voluntary exchange in free markets, as a foundation for public policy? This paper argues that the preponderance of the evidence sides with the interpretation...

Epstein (1995) defended the superiority of simple legal rules over complex, human-designed regulations. Has Epstein’s case for simple rules become obsolete with the arrival of artificial intelligence, and in particular machine learning (ML)? Can ML de-liver better algorithmic rules than...

We analyze a labor search model in which workers choose their search intensity by deciding how often and where to apply for jobs. They observe firms' wage postings prior to their decision. Due to coordination frictions a firm may not receive any applications; otherwise it is able to hire unless...

This paper introduces a model of endogenous network formation and systemic risk. In it, agents form networks that efficiently trade-off the possibility of systemic risk with the benefits of trade. Second, fundamentally ‘safer' economies generate higher interconnectedness, which in turn leads...

Risk compensation can undermine the ability of partially-effective vaccines to curb infectious-disease epidemics: Vaccinated agents may optimally choose to engage in more risky interactions and, as a result, may increase everyone's infection probability. We show that — in contrast to the...

About two thirds of the political committees registered with the Federal Election Commission do not self identify their party affiliations. In this paper we propose and implement a novel Bayesian approach to infer about the ideological affiliations of political committees based on the network of...

“Buy local” arrangements encourage members of a community or group to patronize one another rather than the external economy. They range from formal mechanisms such as local currencies to informal “I'll buy from you if you buy from me” arrangements, and are often championed on social or...

Innovation is typically a trial-and-error process. While some research paths lead to the innovation sought, others result in dead ends. Because firms benefit from their competitors working in the wrong direction, they do not reveal their dead-end findings. Time and resources are wasted on...

Consider two agents who learn the value of an unknown parameter by observing a sequence of private signals. Will the agents commonly learn the value of the parameter, i.e., will the true value of the parameter become approximate common-knowledge? If the signals are independent and identically...