We develop a model of contracting in which individual effort choices are subject to social pressure to conform to the average effort level of others in the same risk-sharing group. As in related models of social interactions, a change in exogenous variables or contract terms generates a social...

Burke, Fournier, and Prasad (2007) present evidence of star effects in the adoption and utilization of stents following their introduction in the mid-1990s. Here, we experiment with alternative constructions of star status and with additional control variables in the analysis and find further...

We develop an explanation of the emergence of local norms, and theassociated phenomenon of geographical variation in behavior.Individuals are assumed to interact locally with neighbors in anenvironment with a network externality. Although many patterns ofbehavior are possible, the dispersed...

Region-specific norms of behavior are a widespread phenomenon. In the case of medical practice, numerous studies have found that geographic location exerts an inordinate influence on the choice of treatments and procedures. This paper shows how the presence of social influence on treatment...

Location-specific norms of behavior are a widespread phenomenon. In the case of medical practice, numerous studies have found that geographic location exerts a strong influence on the choice of treatments and procedures. This paper shows how the presence of social influence on treatment...

This paper relates the diffusion of the coronary stent to the presence of prominent or “star” physicians within a local peer group. The paper uses panel data on coronary care in Florida covering the period immediately following the 1995 Food and Drug Administration (FDA) approval of the...

A standard approach in economic theory is to use a formal language to prove results about an economy or a game. In this paper, model theory is used to examine interpretations of such results. The particular focus is on constructive theorems, since results established by constructive methods are...

Limitations in agents’ ability to observe, measure and compute are studied. A formulation in terms of induced changes in the players’ subjective perception of the game makes it possible to study these phenomena on a common footing with objective variation in the game. We study a model where...