An economic argument in favor of direct democracy in a social choice setting with pure common values, private noisy information about an unobservable payoff-relevant state of the world, and costless voting is essentially one about information aggregation: if all citizens vote according to their...

We analyze the formation of partnerships in social networks. Players need favors at random times and ask their neighbors in the network to form exclusive long-term partnerships that guarantee reciprocal favor exchange. Refusing to provide a favor results in the automatic removal of the...