This chapter shows that networks can have large and differentiated effects on behavior and then argues that social and economic pressures facilitate the formation of heterogeneous networks. Thus networks can play an important role in understanding the wide diversity in human behavior and in...

We consider a budget-constrained mechanism designer who selects an optimal set of projects to maximize her utility. A project's cost is private information and its value for the designer may vary. In this allocation problem, the selection of projects - both which and how many - is endogenously...