Social norms are often posited as an explanation of differences in economic behavior and performance of societies that are difficult to explain by differences in endowments and technology. Economists are often reluctant to incorporate social aspects into their analyses when doing so leads to...

Experimental psychologists and economists construct an individual or interactive decision situation in the laboratory. They find non-negligible differences between the observed behavior of participants and the theoretically implied behavior. We refer here to the expected utility theory and to...

We analyze a model in which agents make investments and then match into pairs to create a surplus. The agents can make transfers to reallocate their pretransfer ownership claims on the surplus. Mailath, Postlewaite, and Samuelson (2013) showed that when investments are unobservable, equilibrium...

Different markets are cleared by different types of prices---a universal price for all buyers and sellers in some markets, seller-specific prices that are uniform across buyers in others, and personalized prices tailored to both the buyer and the seller in yet others. We introduce the notion of...

The authors argue that many goods and decisions are not allocated or made through markets. They interpret an agent's status as a ranking device that determines how well he or she fares in the nonmarket sector. The existence of a nonmarket sector can endogenously generate a concern for relative...

People may be surprised to notice certain regularities that hold in existing knowledge they have had for some time. That is, they may learn without getting new factual information. We argue that this can be partly explained by computational complexity. We show that, given a knowledge base,...