Paper models lender's decision based on project riskiness, trust from borrower's socioeconomic network, and social cost of default for the borrower. The paper suggests a methodology to estimate aggregate level of trustworthiness of borrower in socio-economic network. Our model links the social...

We examine the informal exchange of favors in societies such that any two individuals interact too infrequently to sustain exchange, but such that the social pressure of the possible loss of multiple relationships can sustain exchange. Patterns of exchange that are locally enforceable and...

We investigate the role of manipulation in a model of opinion formation. Agents repeatedly communicate with their neighbors in the social network, can exert effort to manipulate the trust of others, and update their opinions about some common issue by taking weighted averages of neighbors'...

We examine the effectiveness of three democratically chosen rules that alleviate the coordination and cooperation problems inherent in collectively managed common-pool resources. In particular we investigate how rule effectiveness and rule compliance depends on the prevailing local norms and...

Using a sample of Harvard undergraduates, we analyze trust and social capital in two experiments. Trusting behavior and trustworthiness rise with social connection; differences in race and nationality reduce the level of trustworthiness. Certain individuals appear to be persistently more...

This paper investigates how social capital, defined by the strength of civic norms and the density of social networks, affects firms’ trade credit risk. The results show that social capital is negatively related to accounts receivables that are unlikely to be collected, suggesting social...

The object of this paper is to discuss on-line intermediation from the perspective of two-sided markets. It builds a simple model of the intermediation activity when trading partners are involved in a commercial relationship and uses it to illustrate some of the results that emerge in the...

Current merger review law is critically flawed. Courts in Clayton Act Section 7 cases consider the likelihood that a merger will harm competition as a threshold question before considering the size of harm that could ensue. Under current law, to block a merger a judge must find that the deal is...

Merger review in the United States has overlooked a significant competition harm: increasing risk. Mergers can increase both direct and systemic risk. There is now persuasive evidence that negative shocks to a firm can harm the firm’s consumers and trading partners, leading to national...