We model dynamic financing of innovative projects where relational financiers observe entrepreneurs' experimentation and thus information they endogenously produce, before deciding on continued financing. We show that enterpreneurs' optimal information productions follow threshold strategies. Insider financiers extract little or no intermin rent even with full information monopoly, hindering efficient financing ex ante. Independent experimentation by insiders mitigate the problem, but can be either a complement or substitute to entrepreneurs' information production.
Concerns about social image may negatively affect schooling behavior. We identify two potentially important peer cultures: one that stigmatizes effort (thus, where it is “smart to be cool”) and one
that rewards ability (where it is “cool to be smart”). We build a model showing that either may lower the takeup of educational activities when takeup and performance are potentially observable
Scholars have argued that online social networks and personalized web search increase ideological segregation. We investigate the impact of these potentially polarizing channels on news consumption by examining web browsing histories for 50,000 U.S.-located users who regularly read online news. We find that individuals indeed exhibit substantially higher segregation when reading articles shared on social networks or returned by search engines, a pattern driven by opinion pieces. However, these polarizing articles from social media and web search constitute only 2% of news consumption.