Learn More
We decompose the beauty premium in an experimental labor market where 'employers' determine wages of 'workers' who perform a maze-solving task. This task requires a true skill which we show to be unaffected by physical attractiveness. We find a sizable beauty premium and can identify three transmission channels. (1) Physically-attractive workers are more(More)
This paper builds a theory of trust based on informal contract enforcement in social networks. In our model, network connections between individuals can be used as social collateral to secure informal borrowing. We de…ne network-based trust as the highest amount one agent can borrow from another agent, and derive a reduced-form expression for this quantity(More)
We develop a model of informal risk-sharing in social networks, where relationships between individuals can be used as social collateral to enforce insurance payments. We characterize incentive compatible risk-sharing arrangements and obtain two results. (1) The degree of informal insurance is governed by the ex-pansiveness of the network, measured by the(More)
—The success of future P2P applications ultimately depends on whether users will contribute their bandwidth, CPU and storage resources to a larger community. In this paper, we propose a new incentive paradigm, Networked Asynchronous Bilateral Trading (NABT), which can be applied to a broad range of P2P applications. In NABT, peers belong to an underlying(More)
This paper uses a microfinance field experiment in two Lima shantytowns to measure the relative importance of social networks and prices for borrowing. Our design randomizes the interest rate on loans provided by a microfi-nance agency, as a function of the social distance between the borrower and the cosigner. This design effectively varies the relative(More)
The success of future P2P applications ultimately depends on convincing users to volunteer their bandwidth, CPU and storage resources, which is the challenge of incentive design. A natural approach to providing incentives in P2P applications is to use a single global currency, whereby peers earn currency units when contributing resources. Global currencies,(More)
We seed noisy information to members of a real-world social network to study how information diffusion and information aggregation jointly shape social learning. Our environment features substantial social learning. We show that learning occurs via diffusion which is highly imperfect: signals travel only up to two steps in the conversation network and(More)
Friends, neighbors and colleagues play an important role in shaping individual choice. The growth of the internet and assorted technologies has made it possible to collect and process detailed information on social networks. This paper looks at how can firms (and governments) harness the power of social networks to promote their goals. We show that the(More)
Retailers regularly target users with online ads based on their web browsing activity , benefiting both the retailers, who can better reach potential customers, and content providers, who can increase ad revenue by displaying more e↵ective ads. The e↵ectiveness of such ads relies on third-party brokers that maintain detailed user information , prompting(More)
  • 1