We analyze a dynamic model in which players compete in each period in an all-pay competition to have their ideal action implemented. The winning policy at each competition is implemented for that period, but only if it is ranked higher than the status quo, according to some exogenous order. We...

We propose a model of religious organizations which relies on the ability of such organi-zations and personal utility shocks. We show how religious organizations arise endogenously and characterize their features. Specifically, we find that members of the religious organization share similar...

We model an individual who wants to learn about a state of the world. The individual has a prior belief, and has data which consists of multiple forecasts about the state of the world. Our key assumption is that the decision maker identifies explanations that could have generated this data and...

We model an individual who wants to learn about a state of the world. The individual has a prior belief and has data that consist of multiple forecasts about the state of the world. Our key assumption is that the decision maker identifies explanations that could have generated this data and...

In this paper we question the common wisdom that more polarized voters’ opinions imply larger policy polarization. We analyze a voting model in which the source of the polarization in voters’ opinions is “correlation neglect”, that is, voters neglect the correlation in their information...

In this paper we examine the long term effects of socialization and segregation in schools, on labour market outcomes. We incorporate a model of “informational” peer influence by which beliefs of pupils are affected by exposure to other pupils’ posterior beliefs. Specifically, we focus on...

We analyze preferences over redistribution in societies with costly (positive) sorting according to income. We identify a new motivation for redistribution, where individuals support taxation in order to reduce the incentives to sort. We characterize a simple condition over income distributions...

In this paper we offer a new theory of religion. Our theory relies on the assumption that individuals in society have different beliefs about the relation between their actions and the utility they gain in a strategic social interaction (specifically, a Prisoner's Dilemma). This heterogeneity of...

In this paper we analyze elections when voters underestimate the correlation between their information sources ("correlation neglect"). We find that this cognitive bias can improve political outcomes. We show that the extreme beliefs which result from correlation neglect induce some voters to...