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Finite languages, persuasion bias, and opinion fluctuations

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  • Foerster, Manuel

Abstract

We propose a boundedly rational model of opinion formation in which agents are subject to persuasion bias and communicate via finite languages. Agents are organized in a social network and repeatedly update their beliefs based on coarse messages about their neighbors’ beliefs. We show that agents do not reach a consensus; instead, their beliefs keep fluctuating forever if different languages are present in their neighborhoods. In particular, we recover the classical result that under persuasion bias agents typically reach a consensus if there is a unique language in society, while small perturbations lead to fluctuations. Our approach provides and formalizes a possible mechanism to account for theories according to which storytelling may generate excessive confidence swings.

Suggested Citation

  • Foerster, Manuel, 2018. "Finite languages, persuasion bias, and opinion fluctuations," Journal of Economic Behavior & Organization, Elsevier, vol. 149(C), pages 46-57.
    • Handle: RePEc:eee:jeborg:v:149:y:2018:i:c:p:46-57
    DOI: 10.1016/j.jebo.2018.03.001
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    More about this item

    Keywords

    Bounded rationality; Finite languages; Opinion fluctuations; Persistent disagreement; Persuasion bias; Social networks;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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