The Decentralization Theorem (Oates, 1972) is central to the discussion of fiscal federalism. We revisit the role of consumption spillovers in evaluating the merits of (de)centralization. Unlike the general prediction, a higher degree of spillovers may reduce the difference in utility of...

We investigate whether and how social ties affect performance in teams by implementing a field experiment in which a sample of undergraduate students are randomly assigned to either teams composed by friends or teams composed by individuals not linked by friendship relationships. Students...