Firms face an optimization problem that requires a maximal quantity output given a quality constraint. But how do firms incentivize quantity and quality to meet these dual goals, and what role do behavioral factors such as loss aversion play in the tradeoffs workers face? We address these issues...

Principal-agent problems can reduce gains from exchange available in long distance trade. One solution to mitigate this problem is multilateral punishment, whereby groups of principals jointly punish cheating agents by giving them bad reputations. But how does such punishment work when there is...

Recent uprisings in the Arab world consist of individuals revealing vastly different preferences than were expressed prior to the uprisings. This paper sheds light on the general mechanisms underlying large-scale social and institutional change. We employ an agent-based model to test the impact...

In this paper, we empirically test the role that religious and political institutions play in the accumulation of human capital. Using a new data set on literacy in colonial India, we find that Muslim literacy is negatively correlated with the proportion of Muslims in the district, although we...

Why was economic development retarded in the Middle East relative to Western Europe, despite the Middle East being far ahead for centuries after the fall of Rome? A theoretical model inspired and substantiated by the history of interest restrictions suggests that this outcome emanates in part...

Commitment problems are inherent to non-binding conflict resolution mechanisms, since an unsatisfied party can ignore the resolution and initiate conflict. We provide experimental evidence suggesting that even in the absence of binding contractual agreements individuals often avoid conflict by...