Two players with preferences distorted by the focusing effect (Koszegi and Szeidl, 2013) negotiate an agreement over several issues and one transfer. We show that, as long as their preferences are differentially distorted, an issue will be inefficiently left out of the agreement or inefficiently...

Two negotiating parties with preferences distorted by the focusing effect (Koszegi and Szeidl, 2013) may implement an agreement that is inefficient. In particular, an issue will be inefficiently left out of the agreement or inefficiently included in the agreement whenever the importance of the...

Millions of households worldwide rely on savings groups (SGs) to satisfy their financial needs, yet very little is known about these groups' ability to meet them. In this paper, we provide a description of the basic structure and functioning of SGs, develop a theoretical model based on this...

In teamwork settings, providing effective leadership can be challenging for team leaders due to multitasking and the difficulty in measuring and rewarding leadership input. These challenges might lead to underprovision of leadership activities, which can ultimately impede the productivity of the...

This paper analyzes social group formation when agents are subject to peer effects within groups increasing human capital and instantaneous utility. When agents are heterogeneous on two dimensions, ability and social skills, and monetary payments are not feasible the model predicts segregation...

Economic institutions determine prospects for growth and development. In this paper a condition on the primitives determines whether an economy supports institutions that implement markets. Agents differ in land holdings, skill, and power. A competitive market assigns land to the skilled, not...