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Correlated Equilibrium, Conformity, and Stereotyping in Social Groups

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  • EDWARD CARTWRIGHT
  • MYRNA WOODERS

Abstract

We argue that a social norm and the coordination of behavior within social groups can be expressed by a correlated equilibrium. Given a social group structure (a partition of individuals into social groups), we propose four conditions that one may expect of a correlated equilibrium consistent with social norms. These are: (1) within-group anonymity (conformity within groups), (2) group independence (no conformity between groups), (3) homophily (individuals in the same group have similar attributes), and (4) predictable group behavior (ex post stability). We demonstrate that correlated equilibrium satisfying (1)–(3) exist very generally and equilibrium satisfying (1)–(4) exist in games with many players. We also consider stereotyped beliefs—beliefs that all individuals in a social group can be expected to behave in the same way—and show that stereotyping is not costly to the person who stereotypes but may or may not be beneficial to society.

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  • Edward Cartwright & Myrna Wooders, 2014. "Correlated Equilibrium, Conformity, and Stereotyping in Social Groups," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 16(5), pages 743-766, October.
    • Handle: RePEc:bla:jpbect:v:16:y:2014:i:5:p:743-766
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    References listed on IDEAS

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    Cited by:

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    2. Pieter H.M. RUYS, 2014. "Architecture of an Economy with Social Enterprises: the Relational Capacity Approach," CIRIEC Working Papers 1413, CIRIEC - Université de Liège.
    3. Agnieszka Wiszniewska-Matyszkiel, 2017. "Redefinition of Belief Distorted Nash Equilibria for the Environment of Dynamic Games with Probabilistic Beliefs," Journal of Optimization Theory and Applications, Springer, vol. 172(3), pages 984-1007, March.

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