In this paper we question the common wisdom that more polarized voters’ opinions imply larger policy polarization. We analyze a voting model in which the source of the polarization in voters’ opinions is “correlation neglect”, that is, voters neglect the correlation in their information...

In this paper we examine the long term effects of socialization and segregation in schools, on labour market outcomes. We incorporate a model of “informational” peer influence by which beliefs of pupils are affected by exposure to other pupils’ posterior beliefs. Specifically, we focus on...

In this Paper we extend the cheap talk model of Crawford and Sobel (1982) to a multidimensional state space and policy space. We provide a characterization of equilibria. We focus on the question of feasibility of information transmission, for large degrees of conflict of interests between the...

We model an individual who wants to learn about a state of the world. The individual has a prior belief and has data that consist of multiple forecasts about the state of the world. Our key assumption is that the decision maker identifies explanations that could have generated this data and...

We analyze preferences over redistribution in societies with costly (positive) sorting according to income. We identify a new motivation for redistribution, where individuals support taxation in order to reduce the incentives to sort. We characterize a simple condition over income distributions...

In this paper we analyze elections when voters underestimate the correlation between their information sources ("correlation neglect"). We find that this cognitive bias can improve political outcomes. We show that the extreme beliefs which result from correlation neglect induce some voters to...

We develop a model of social signaling of religiosity and cooperative behavior in religious organizations. The model embeds a ritual-based religious organization in which signaling arises through the use of costly rituals, and a discipline-based religious organization in which such signaling...

As Weber (<link href="#jpet12072-bib-0027"/>) recognized, Calvinistic beliefs about predestination may constitute a powerful incentive for good works; an individual wishes to receive assurances about her future prospects of salvation, and good works may provide a positive signal about such prospects. These beliefs can in turn...

We consider dynamic decision making in a legislature, in which in each period legislators vote between the status quo (previous periodʼs policy) and a new bill. However, the agenda formation process is captured by interest groups, that is, the new bill on the agenda is determined by an all-pay...

This paper provides a theoretical explanation for the democratic peace hypothesis (i.e., the observation that democracies rarely fight one another). We show that, when information asymmetries and strategic complements are present in the conflict resolution game, the strategic interaction between...