We build a model of informal risk-sharing among agents organized in a social network. A connection between individuals serves as collateral that can be used to enforce insurance payments. We characterize incentive compatible risk-sharing arrangements for any network structure, and develop two...

Metacognition is knowledge that can be expressed as confidence judgments about what we know (monitoring) and by strategies for learning what we don’t know (control). Although a substantial literature exists on cognitive processes in animals, little is known about their metacognitive abilities....

A welfarist way of allocating resources consists in 1) equipping individuals with comparable indices of their well-being and 2) applying a unique aggregation rule to individual well-being levels. An equality of opportunity way of allocating resources consists in 1) making the distinction between...

Theories of focal points typically assume that games have inherent labelings or "frames" and then construct models of how players perceive and exploit these frames to identify focal equilibria. This paper asks instead how evolutionary considerations determine which aspects of a frame are likely...

The possibility of treason by a close associate has been a nightmare of most dictators throughout history. Better informed viziers are also better able to discriminate among potential plotters, and this makes them more risky subordinates for the dictator. To avoid this, dictators, especially...

This paper introduces two complementary models of firm-specific training: an informational model and a productivity-enhancement model. In both models, market provision of firm-specific training is inefficient. However, the nature of the inefficiency depends on the balance between the two key...

We examine how the size of an option set and the mode in which the options are processed interact to influence the experience of making a choice. Two studies show that elaborative processing enhances positive affect when consumers choose from limited options but depletes positive affect when...

This paper investigates possible effects of political activity on pharmaceutical prices, focusing on the health care reform period. We characterize firms based on their vulnerability to future price regulation and find that the more vulnerable firms were more likely to take various actions to...