We provide an explanation of the low willingness to save that is observed in many poor countries. Our explanation is based on the hypothesis that people have an over-optimistic outlook. As discussed in the psychological literature, an illusionary positive view of the future may be a good thing....

We model the symbiotic relationship between criminals and a partnership of protection providers - the Firm. In the absence of state authority, insecurity and crime generate a demand for protection. When the protection providers themselves are recruited among criminals, the prospect of graduating...

We model the symbiotic relationship between criminals and a partnership of protection providers - the Firm. In the absence of state authority, insecurity and crime generate a demand for protection. When the protection providers themselves are recruited among criminals, the prospect of graduating...

We provide an explanation of the low willingness to save that is observed in many poor countries. Our explanation is based on the hypothesis that people have an over-optimistic outlook. As discussed in the psychological literature, an illusionary positive view of the future may be a good thing....