This paper considers a model of economic network characterized by an endogenous architecture and frictions in the relations among agents as described in Bala and Goyal (2000). We propose a similar network model with the difference that frictions in the relations among agents are endogenous....

This paper studies how heterogeneity in income dynamics affects the POUM hypothesis (the idea that poor people do not support high level of redistribution because they hope to be rich in the future). We consider a setting where individuals evaluate their expected future income using both their...