Rachel Kranton

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This paper considers how identity, a person’s sense of self, affects economic outcomes.We incorporate the psychology and sociology of identity into an economic model of behavior. In the utility function we propose, identity is associated with different social categories and how people in these categories should behave. We then construct a simple(More)
This paper presents evidence on how farmers’ decisions to adopt a new crop, sunflower, relate to the adoption choices of farmers in their social network of family and friends. We show that the relationship is shaped as an inverse-U, suggesting social effects are positive when there are few adopters in the network, and negative when there are many. We also(More)
This paper considers incentives to provide goods that are non-excludable along social or geographic links. We find, first, that networks can lead to specialization in public good provision. In every social network there is an equilibrium where some individuals contribute and others free-ride. In many networks, this extreme is the only outcome. Second,(More)
O n plebes’ first day at West Point, called R-Day, they strip down to their underwear. Their hair is cut off. They are put in uniform. They then must address an older cadet, with the proper salute and with the statement: “Sir, New Cadet Doe reports to the cadet in the Red Sash for the first time as ordered.” Plebes must stand and salute and repeat, and(More)
Many studies have documented large and persistent productivity differences across producers, even within narrowly defined industries. This paper both extends and departs from the past literature, which focused on technological explanations for these differences, by proposing that demand-side features also play a role in creating the observed productivity(More)
The evidence that the same income can lead to different household decisions, depending on who the earner is, has led to an effort to replace the standard household model with the collective model , which recognises that a household’s decisions depend on the power balance between the husband and the wife. This article recognises that the power balance can,(More)
Because it is difficult to fully control behavior with incentives and contracts (Canice Prendergast, 1999), the success of organizations depends on members’ willingness to take unselfish, efficiency-enhancing actions, or on what George A. Akerlof and Rachel E. Kranton (2005) call “motivational capital” (if, for example, workers may put in extra effort even(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)
T HIS REVIEW culls noneconomic literature on education—hy sociologists, anthropologists, reformers, and practitioners— to present a new economic theory of students and schools. This theory integrates a sociological view of education with economic analysis. In a classic economic model, students choose effort (or time) in school to balance its discounted(More)