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Social interaction and conformism in a random utility model


  • Barucci, Emilio
  • Tolotti, Marco


We analyze a class of dynamic binary choice models with social interaction. Agents are heterogeneous and their degree of conformism (taste externality) changes over time endogenously. We show that social interaction in itself is not enough to observe multiple equilibria and that the equilibrium outcome is not necessarily a polarized society. The social outcome depends on the law of motion that drives the evolution of taste externality.

Suggested Citation

  • Barucci, Emilio & Tolotti, Marco, 2012. "Social interaction and conformism in a random utility model," Journal of Economic Dynamics and Control, Elsevier, vol. 36(12), pages 1855-1866.
  • Handle: RePEc:eee:dyncon:v:36:y:2012:i:12:p:1855-1866 DOI: 10.1016/j.jedc.2012.06.005

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    References listed on IDEAS

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    Cited by:

    1. Colapinto, Cinzia & Sartori, Elena & Tolotti, Marco, 2014. "Awareness, persuasion, and adoption: Enriching the Bass model," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 395(C), pages 1-10.
    2. Cinzia Colapinto & Elena Sartori & Marco Tolotti, 2012. "A two-stage model for diffusion of innovations," Working Papers 16, Department of Management, Università Ca' Foscari Venezia.

    More about this item


    Conformism; Continuous time Markov chains; Mean field interaction; Random utility models; Social interaction;

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium


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