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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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    1. Goldbaum David, 2019. "Conformity and Influence," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 19(1), pages 1-29, January.
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    3. 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.
    4. 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.
    5. Trevor Kollmann & Simone Marsiglio & Sandy Suardi & Marco Tolotti, 2021. "Social interactions, residential segregation and the dynamics of tipping," Journal of Evolutionary Economics, Springer, vol. 31(4), pages 1355-1388, September.
    6. Stephan Kroll & Aric P. Shafran, 2018. "Spatial externalities and risk in interdependent security games," Journal of Risk and Uncertainty, Springer, vol. 56(3), pages 237-257, June.
    7. Zhihan Cui & Geoffrey Heal & Howard Kunreuther & Lu Liu, 2021. "The Political Economy of Responses to COVID-19 in the U.S.A," NBER Working Papers 28578, National Bureau of Economic Research, Inc.
    8. Geoffrey Heal & Howard Kunreuther, 2011. "Tipping Climate Negotiations," NBER Working Papers 16954, National Bureau of Economic Research, Inc.
    9. Diane Coyle, 2016. "The Political Economy of National Statistics," Economics Discussion Paper Series 1603, Economics, The University of Manchester.
    10. Natasha Chichilnisky-Heal & Geoffrey Heal, 2015. "Host-MNC Relations in Resource-Rich Countries," NBER Working Papers 21712, National Bureau of Economic Research, Inc.
    11. Robert Hahn & Robert Ritz, 2014. "Optimal Altruism in Public Good Provision," Cambridge Working Papers in Economics 1403, Faculty of Economics, University of Cambridge.
    12. Pakhtigian, Emily L. & Dickinson, Katherine L. & Orgill-Meyer, Jennifer & Pattanayak, Subhrendu K., 2022. "Sustaining latrine use: Peers, policies, and sanitation behaviors," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 223-242.
    13. Shafran, Aric P. & Lepore, Jason J., 2011. "Subsidization to induce tipping," Economics Letters, Elsevier, vol. 110(1), pages 32-35, January.
    14. Van Parys, Jessica & Ash, Elliott, 2018. "Sequential decision-making with group identity," Journal of Economic Psychology, Elsevier, vol. 69(C), pages 1-18.
    15. Heggedal, Tom-Reiel & Helland, Leif, 2014. "Platform selection in the lab," Journal of Economic Behavior & Organization, Elsevier, vol. 99(C), pages 168-177.
    16. Zimmerman, Brianne R. & Collins, Alan R. & Lacombe, Don, 2017. "Analyzing the Spatial Distribution of NRCS Conservation Programs in West Virginia," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258378, Agricultural and Applied Economics Association.
    17. 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.
    18. Zhihan Cui & Geoffrey Heal & Howard Kunreuther, 2020. "Covid-19, Shelter-In Place Strategies and Tipping," NBER Working Papers 27124, National Bureau of Economic Research, Inc.
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    21. AJ Bostian & David Goldbaum, 2016. "Emergent Coordination among Competitors," Working Paper Series 36, Economics Discipline Group, UTS Business School, University of Technology, Sydney.

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    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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