We study the optimal design of status classifications in organizational structures under the assumption that agents in a lottery (Tullock) contest care about their relative position. We assume that there are two status categories and a designer who determines their sizes in order to maximize the...

Why are people often uncomfortable dealing with financial decisions? We propose that people perceive financial decisions – more so than decisions in many other equally complex and important domains – as compatible with a cold, analytical mode of thinking and as incompatible with feelings and...