Advanced Search
MyIDEAS: Login

Similarity and polarization in groups

Contents:

Author Info

  • Baccara, Mariagiovanna
  • Yariv, Leeat

Abstract

The focus of this paper is the endogenous formation of peer groups. We study a model in which agents choose their peers prior to making decisions on multiple issues. Agents differ in how much they value the decision outcomes on one issue relative to another. While each individual can collect information on at most one issue, all information is shared within the group. Thus, the group's preference composition affects the type of information that gets collected. We characterize stable groups, groups that are optimal for all their members. When information costs are low, stable groups must be sufficiently homogeneous. Furthermore, stability requires more similarity among extremists than among moderate individuals. When information costs are substantial, a free rider problem arises, and makes extreme peers more desirable, as they are more willing to invest in information acquisition. We show that, as information costs grow, polarization appears and becomes increasingly pronounced in stable groups. --

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://econstor.eu/bitstream/10419/54574/1/682526746.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Social Science Research Center Berlin (WZB) in its series Discussion Papers, Research Unit: Market Behavior with number SP II 2010-20.

as in new window
Length:
Date of creation: 2010
Date of revision:
Handle: RePEc:zbw:wzbmbh:spii201020

Contact details of provider:
Postal: Reichpietschufer 50, 10785 Berlin, Germany
Phone: ++49 - 30 - 25491 - 0
Fax: ++49 - 30 - 25491 - 684
Email:
Web page: http://www.wzb.eu/
More information through EDIRC

Related research

Keywords: Homophily; Polarization; Group Formation; Information Collection;

Other versions of this item:

Find related papers by JEL classification:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Marcin Peski & Bal√°zs Szentes, 2012. "Spontaneous Discrimination," Working Papers 2012-005, Becker Friedman Institute for Research In Economics.
  2. Opolot, Daniel & Azomahou, Theophile, 2012. "Learning and convergence in networks," MERIT Working Papers 074, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  3. Jacob K. Goeree & Margaret A. McConnell & Tiffany Mitchell & Tracey Tromp & Leeat Yariv, 2010. "The 1/d Law of Giving," American Economic Journal: Microeconomics, American Economic Association, vol. 2(1), pages 183-203, February.
  4. Opolot, Daniel & Azomahou, Theophile, 2012. "Learning and convergence in networks," MERIT Working Papers 074, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:zbw:wzbmbh:spii201020. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.