Social interaction and conformism in a random utility model
Abstract
We analyze a class of dynamic binary choice models with social interaction. Agents are heterogeneous and their degree of conformism (taste externality) changes over time endogenously. We show that social interaction in itself is not enough to observe multiple equilibria and that the equilibrium outcome is not necessarily a polarized society. The social outcome depends on the law of motion that drives the evolution of taste externality.Download Info
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Bibliographic Info
Article provided by Elsevier in its journal Journal of Economic Dynamics and Control.
Volume (Year): 36 (2012)
Issue (Month): 12 ()
Pages: 1855-1866
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Web page: http://www.elsevier.com/locate/jedc
Related research
Keywords: Conformism; Continuous time Markov chains; Mean field interaction; Random utility models; Social interaction;Find related papers by JEL classification:
- D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
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Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Cinzia Colapinto & Elena Sartori & Marco Tolotti, 2012. "A two-stage model for diffusion of innovations," Working Papers 16, Department of Management, Università Ca' Foscari Venezia.
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