We develop a formula for the optimal size of a joint savings association between individuals who share the same financial goal and who can save towards that goal at the same rate. Our motivating example and the core of our analysis is a Rotating Savings and Credit Association (ROSCA). We measure...

This paper models the welfare consequences of social fragmentation arising from technological advance. We start from the premise that technological progress falls primarily on market-traded commodities rather than prosocial relationships, since the latter intrinsically require the expenditure of...

We consider a framework where the optimal decision rule determining the collective choice depends in a simple way on the decision makers' posterior probabilities of a particular state of nature. Nevertheless, voting is generally an inefficient way to make collective choices and this paper sheds...

This paper studies the assignment of decision makers to two committees that make decisions by a simple majority rule. There is an even number of decision makers at each of various skill levels and each committee has an odd number of members. Surprisingly, even with the symmetric assumptions in...

This paper proposes a two-step aggregation method for measuring long-term income inequality and income mobility, where mobility is defined as an equalizer of long-term income. The first step consists of aggregating the income stream of each individual into a measure of permanent income, which...

In this paper, we introduce and apply a general framework for evaluating long-term income distributions according to the Equality of Opportunity principle. Our framework allows for both an ex-ante and an ex-post approach to EOp. Our ex-post approach relies on a permanent income measure defined...

The assumption that payoff-relevant information is observable but not verifiable is important for many core results in contract, organizational and institutional economics. However, subgame-perfect implementation (SPI) mechanisms – which are based on off-equilibrium arbitration clauses that...

Government intervention often gives rise to contests and the government can influence their outcome by choosing their type. We consider a contest with two interest groups: one that is governed by a central planner and one that is not. Rent dissipation is compared under two well-known contest...

We develop new facts relating news coverage, interest groups, and events in the legislative histories of minimum wage increases. First, we create and validate a database of news articles that includes coverage of minimum wages and organized labor. Second, we show that policy changes predict...

This paper analyzes how to allocate experts into committees that use the unanimity rule to make decisions. We show that an optimal allocation of experts is extremely asymmetric. To reach the optimal allocation, therefore, one needs only to rank the experts in terms of their abilities and then...