This chapter surveys the recent economic literature on the relationships between globalization and cultural diversity. We first review the different channels through which international integration interacts with cultural diversity across individuals, communities, and nations. We then present...

This chapter provides an introduction to social economics, the study, with the methods of economics, of social phenomena in which aggregates affect individual choices. Such phenomena include social norms and conventions, cultural identities and stereotypes, peer and neighborhood effects,...

This paper presents a survey of the theoretical and empirical literature on cultural transmission and socialization. It has been prepared for the Handbook of Social Economics , edited by Jess Benhabib, Alberto Bisin, and Matt Jackson, to be published by Elsevier Science in 2010.

We examine, with the tools of economics, a fundamental tenet of some of the most recent theoretical work in sociology, which we refer to as the Postmodernist Critique : preferences are socially constructed, firms exploit their monopoly power through advertising in order to create new (false)...

Cultural transmission arguably plays an important role in the determination of many fundamental preference traits (e.g., discounting, risk aversion and altruism) and most cultural traits, social norms, and ideological tenets ( e.g., attitudes towards family and fertility practices, and attitudes...

We propose a theoretical framework to study the determinants of ethnic and religious identity along two distinct motivational processes which have been proposed in the social sciences: cultural conformity and cultural distinction. Under cultural conformity, ethnic identity is reduced by...

We propose a theoretical framework to study the determinants of ethnic and religious identity along two distinct motivational processes which have been proposed in the social sciences: cultural conformity and cultural distinction. Under cultural conformity, ethnic identity is reduced by...

The opacity of over-the-counter (OTC) markets – in which a large number of financial products including credit derivatives trade – appears to have played a central role in the ongoing financial crisis. We model such OTC markets for risk-sharing in a general equilibrium setup where agents...

This paper analyzes a class of competitive economies with production, incomplete financial markets, and agency frictions. Firms take their production, financing, and contractual decisions so as to maximize their value under rational conjectures. We show that competitive equilibria exist and that...

We study the wealth distribution in Bewley economies with idiosyncratic capital income risk. We show analytically that under rather general conditions on the stochastic structure of the economy, a unique ergodic distribution of wealth displays a fat tail; more precisely, a Pareto distribution in...