The focus of this paper is the endogenous formation of peer groups. We study a model in which agents choose their peers prior to making decisions on multiple issues. Agents differ in how much they value the decision outcomes on one issue relative to another. While each individual can collect...

The focus of this paper is the endogenous formation of peer groups. In our model, agents choose peers before making contributions to public projects, and they differ in how much they value one project relative to another. Thus, the groups preference composition affects the type of contributions...