This study explores the formation of buyer-seller relationships in markets with observable quality. We develop a model that explains why relationships form in equilibrium within such markets. A key feature of our model is that as individuals gain experience in the marketplace, they resolve...

We introduce uncertainty and risk aversion to the study of international environmental agreements. We consider a simple model with identical agents and linear payoffs. We show that a stable treaty with positive action always exists. While uncertainty lowers the actions of signatories, we find...

Many environmental policies including the Kyoto Protocol, the Acid Rain Program, the Montreal Protocol and the phase-out of leaded gas are designed to achieve a target level of abatement within a specified period of time. This paper examines how pollution abatement should be allocated over time...

We provide new results regarding the identification of peer effects. We consider an extended version of the linear-in-means model where each individual has his own specific reference group. Interactions are thus structured through a social network. We assume that correlated unobservables are...

We study the influence of social networks on labor market transitions. We develop the first model where social ties and job status coevolve through time. Our key assumption is that the probability of formation of a new tie is greater between two employed individuals than between an employed and...

This paper considers the formation of risk-sharing networks. Following empirical findings, we build a model where risk-sharing takes place between pairs of individuals. We ask what structures emerge when pairs can agree to form links, but people cannot coordinate links across a population. We...

We survey and synthesize models of network formation based on random graphs and stochastic processes. We organize the material according to whether the population is treated as fixed or dynamic. We pay particular attention to the effects of homophilous linking on network structure. Finally, we...

How should we make value judgments about wealth inequality? Harsanyi (1953) proposes to take an individual who evaluates her well-being by expected utility and ask her to evaluate the wealth possibilities ex-ante (i.e. before she finds her place in society, i.e., under the "veil of ignorance" of...