Knowledge that Transforms

We provide experimental evidence that subjects blame others on the basis of events they are not responsible for. In our experiment an agent chooses between a lottery and a safe asset; payment from the chosen option goes to a principal, who then decides how much to allocate between the agent and a third party. We observe widespread blame: regardless of their choice, agents are blamed by principals for the outcome of the lottery, an event they are not responsible for. We provide an explanation of this apparently irrational behavior with a delegated-expertise principal-agent model, the subjects’ salient perturbation of the environment.

Child sponsorship is a leading form of direct aid from wealthy country households to children in developing countries. Over 9 million children are supported through international sponsorship organizations. Using data from six countries, we estimate impacts on several outcomes from sponsorship through Compassion International, a leading child sponsorship organization. To identify program effects, we utilize an age-eligibility rule implemented when programs began in new villages. We find large, statistically significant impacts on years of schooling; primary, secondary, and tertiary school completion; and the probability and quality of employment. Early evidence suggests that these impacts are due, in part, to increases in children’s aspirations.

I study a model of mobilization and rebel tactical choice. Rebel leaders choose between conventional tactics that are heavily reliant on mobilization, irregular tactics that are less so, and withdrawal from conflict. The model yields the following results, among others. Increased nonviolent opportunity has a nonmonotone effect on the use of irregular tactics. Conflict has option value, so irregular campaigns last longer than the rebels’ short-term interest dictates, especially in volatile military environments. By demonstrating lack of rebel capacity and diminishing mobilization, successful counterinsurgencies may increase irregular violence. Conflict begets conflict by eroding outside options, thereby increasing mobilization.

We present a theory of context-dependent choice in which a consumer’s attention is drawn to salient attributes of goods, such as quality or price. An attribute is salient for a good when it stands out among the good’s attributes, relative to that attribute’s average level in the choice set (or generally, the evoked set). Consumers attach disproportionately high weight to salient attributes and their choices are tilted toward goods with higher quality/price ratios. The model accounts for a variety of disparate evidence, including decoy effects, context-dependent willingness to pay, and large shifts in demand in response to price shocks.