A pervasive empirical finding is that mutual fund managers do not maintain their performance. In this paper, I show that social interactions can explain this fact. To do so, I allow a “crowd” of managers to meet at random times and exchange ideas within a rational-expectations equilibrium...

A group of individuals, with a potential conflict of interest, face a choice among alternatives. There is a network externality such that the chosen alternative yields value only if sufficiently many individuals get on board. Their preferences for each alternative and the benefit derived from a...

Banks failed in 2008 because individuals with knowledge of risks were not connected to individuals who had the incentive and power to take corrective action. Evidence of this problem is provided by reports from the Lehman liquidator and The US Government Financial Crisis Inquiry Commission....

Agents on a network experiment repeatedly, and simultaneously with the aim of choosing the optimal (uncertain) action between two alternatives. If each agent is forward looking and rational and observes the behavior only of those in his reference group, could different opinions emerge...

If buyers can only participate via referrals, referral monotonicity holds in the Vickrey-Clarke-Groves (VCG) mechanism, i.e., any buyer's payoff weakly increases as her connection (i.e., referable buyers) expands. However, if every buyer expands her connection, buyers are weakly worse off and...

Social media have become an increasingly important source of information about political, social and economic issues. While beneficial on many levels, the decentralized nature of these media may expose societies to novel risks of manipulation by third parties. To evaluate these risks, we study a...

We analyze the design of a mechanism to extract a ranking of individuals according to a unidimensional characteristic, such as ability or need. Individuals, connected on a social network, only have local information about the ranking. We show that a planner can construct an ex post incentive...

We propose a parsimonious model of over-the-counter trading with asymmetric information to rationalize the existence of intermediation chains that stand between buyers and sellers of assets. Trading an asset through several heterogeneously informed intermediaries can preserve the efficiency of...