Traders with specific characteristics operating in a pairwise exchange market may prefer to meet other traders with similar (or complementary) characteristics, while other categories of traders may not have such preferences. The existence of the second type imposes a negative externality on the...

There is scope and incentive for "stores" to endogenously arise in an exchange economy when agents possess different levels of bargaining power and coalition is costly. In the absence of stores, agents face a trading lottery where the expected outcome for an individual agent depends upon his...

There is substantial experimental and empirical evidence to suggest that individual behaviour in bilateral or small-group interactions is affected by social norms. Further, social norms vary according to context. Previous research largely focuses on norms of fairness, not norms per se. We design...

We analyze a firm's job-assignment and worker-monitoring decisions when workers face occasional crises. Firms prefer to assign good workers to a difficult task and to not employ bad workers. Firms observe failures but only observe successfully resolved crises if they monitor the worker. If...