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Social Reinforcement: Cascades, Entrapment, and Tipping

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  • Geoffrey Heal
  • Howard Kunreuther

Abstract

The actions of different agents sometimes reinforce each other. Examples are network effects and the threshold models used by sociologists as well as (Harvey) Leibenstein's "bandwagon effects." We model such situations as a game with increasing differences, and show that tipping of equilibria, cascading, and clubs with entrapment are natural consequences of this mutual reinforcement. If there are several equilibria, one of which Pareto dominates, then the inefficient equilibria can be tipped to the efficient one, a result of interest in the context of coordination problems. We characterize the smallest tipping set. (JEL C72, D80, D85, Z13)

Suggested Citation

  • Geoffrey Heal & Howard Kunreuther, 2010. "Social Reinforcement: Cascades, Entrapment, and Tipping," American Economic Journal: Microeconomics, American Economic Association, vol. 2(1), pages 86-99, February.
  • Handle: RePEc:aea:aejmic:v:2:y:2010:i:1:p:86-99 Note: DOI: 10.1257/mic.2.1.86
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Cohen, Mark A. & Vandenbergh, Michael P., 2012. "The potential role of carbon labeling in a green economy," Energy Economics, Elsevier, vol. 34(S1), pages 53-63.
    2. Fergus Green, 2015. "Nationally Self-Interested Climate Change Mitigation: A Unified Conceptual Framework," GRI Working Papers 199, Grantham Research Institute on Climate Change and the Environment.
    3. Diane Coyle, 2016. "The Political Economy of National Statistics," The School of Economics Discussion Paper Series 1603, Economics, The University of Manchester.
    4. Natasha Chichilnisky-Heal & Geoffrey Heal, 2015. "Host-MNC Relations in Resource-Rich Countries," NBER Working Papers 21712, National Bureau of Economic Research, Inc.
    5. Robert Hahn & Robert Ritz, 2014. "Optimal Altruism in Public Good Provision," Cambridge Working Papers in Economics 1403, Faculty of Economics, University of Cambridge.
    6. Shafran, Aric P. & Lepore, Jason J., 2011. "Subsidization to induce tipping," Economics Letters, Elsevier, vol. 110(1), pages 32-35, January.
    7. Heggedal, Tom-Reiel & Helland, Leif, 2014. "Platform selection in the lab," Journal of Economic Behavior & Organization, Elsevier, vol. 99(C), pages 168-177.
    8. David Goldbaum, 2016. "Conformity and Influence," Working Paper Series 35, Economics Discipline Group, UTS Business School, University of Technology, Sydney.
    9. Tavoni, Alessandro & Levin, Simon, 2014. "Managing the climate commons at the nexus of ecology, behaviour and economics," LSE Research Online Documents on Economics 60823, London School of Economics and Political Science, LSE Library.
    10. Richter, Andries & van Soest, Daan & Grasman, Johan, 2013. "Contagious cooperation, temptation, and ecosystem collapse," Journal of Environmental Economics and Management, Elsevier, pages 141-158.
    11. repec:spr:climat:v:144:y:2017:i:1:d:10.1007_s10584-017-2043-8 is not listed on IDEAS
    12. AJ Bostian & David Goldbaum, 2016. "Emergent Coordination among Competitors," Working Paper Series 36, Economics Discipline Group, UTS Business School, University of Technology, Sydney.

    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • 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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