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Conformity and out of equilibrium beliefs

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  • Cartwright, Edward

Abstract

We analyze a model of conformity with contrasting inferences. Given a form of 'strong inferences', any non-conforming agent is believed to have 'extreme preferences' and can expect to receive low esteem. With a weaker form of inferences, a non-conforming agent could be inferred to have 'average preferences' and can expect a smaller fall in esteem. We find that the type of inferences need not influence whether a conformist equilibrium exists. It will, however, impact on the size of the set of conformist equilibria and thus weakening inferences acts as an equilibrium selection device.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 70 (2009)
Issue (Month): 1-2 (May)
Pages: 164-185

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Handle: RePEc:eee:jeborg:v:70:y:2009:i:1-2:p:164-185

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Web page: http://www.elsevier.com/locate/jebo

Related research

Keywords: Conformity Social norms Out of equilibrium beliefs Signalling;

References

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  1. Lindbeck, Assar & Nyberg, Sten & Weibull, Jörgen W., 1997. "Social Norms and Economic Incentives in the Welfare State," Working Paper Series 476, Research Institute of Industrial Economics.
  2. Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414.
  3. Cho, In-Koo & Kreps, David M, 1987. "Signaling Games and Stable Equilibria," The Quarterly Journal of Economics, MIT Press, vol. 102(2), pages 179-221, May.
  4. Akerlof, George A, 1980. "A Theory of Social Custom, of Which Unemployment May be One Consequence," The Quarterly Journal of Economics, MIT Press, vol. 94(4), pages 749-75, June.
  5. Ofer H. Azar, 2003. "What sustains social norms and how they evolve? The case of tipping," Others 0309001, EconWPA.
  6. Elster, Jon, 1989. "Social Norms and Economic Theory," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 99-117, Fall.
  7. Bernheim, B Douglas, 1994. "A Theory of Conformity," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 841-77, October.
  8. Kreps, David M, 1997. "Intrinsic Motivation and Extrinsic Incentives," American Economic Review, American Economic Association, vol. 87(2), pages 359-64, May.
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