How Groups Can Foster Consensus: The Case of Local Cultures

A local culture denotes a set of rules on business behaviour among firms in a cluster. Similar to social norms or conventions, it is an emergent feature of interaction in an economic network. To model its emergence, we consider a distributed agent population, representing cluster firms. Further, we build on a continuous opinion dynamics model with bounded confidence (ε), which assumes that two agents only interact if differences in their behaviour are less than ε. Interaction results in more similarity of behaviour, i.e. convergence towards a common mean. Two aspects extend this framework: (i) The agent's in-group consisting of acquainted interaction partners is explicitly taken into account, leading to an effective agent behaviour as agents try to continue to interact with past partners and thus seek to stay sufficiently close to them. (ii) The in-group network structure changes over time, as agents form new links to other agents with sufficiently close effective behaviour or delete links to agents no longer close in behaviour. Thus, the model introduces a feedback mechanism of agent behaviour and in-group structure. Studying its consequences by means of agent-based computer simulations, we find that for narrow-minded agents (low ε) the feedback mechanism helps find consensus more often, whereas for open-minded agents (high ε) this does not necessarily hold. Overall, the dynamics of agent interaction in clusters as modelled here, are conducive to consensus among all or a majority of agents.