We present a model where society is partitioned into groups, or communities, whose preferences may conflict. In particular, the actions of members of a certain group can inflict negative spillovers on members of other groups. We show that, on one hand, coordination at the group-level may be...

This paper provides evidence from a field experiment on the effect of psychological pressure in competitive environments. In our experiment, we analyze a setup of sequential tournaments, in which participants are matched in pairs and experience a kind of pressure that, as in most real world...

We model network formation when heterogeneous nodes enter sequentially and form connections through both random meetings and network-based search, but with type-dependent biases. We show that there is “long-run integration”, whereby the composition of types in sufficiently old nodesʼ...

The best shot game applied to networks is a discrete model of many processes of contribution to local public goods. It generally has a wide multiplicity of equilibria that we refine through stochastic stability. We show that, depending on how we define perturbations – i.e., possible mistakes...

We show that the introduction of Tobin taxes in agent-based models of currency markets can lead to a reduction of both speculative trading and the magnitude of exchange rate fluctuations at intermediate tax rates. In this regime revenues obtained from speculators are maximal for the institutions...

We develop a model of friendship formation that sheds light on segregation patterns observed in social and economic networks. Individuals have types and see type-dependent benefits from friendships. We examine the properties of a steady-state equilibrium of a matching process of friendship...