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Heterogeneity in preferences and behavior in threshold models

Author

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  • Philip R Neary

    (Royal Holloway University of London, UK)

  • Jonathan Newton

Abstract

A coordination game is repeatedly played on a graph by players (vertices) who have heterogeneous cardinal preferences and whose strategy choice is governed by the individualistic asynchronous logit dynamic. The idea of potential driven autonomy of sets of players is used to derive results on the possibility of heterogeneous preferences leading to heterogeneous behavior. In particular, a class of graphs is identified such that for large enough graphs in this class, diversity in ordinal preferences will nearly always lead to heterogeneity in behavior, regardless of the cardinal strength of the preferences. These results have implications for network design problems, such as when a social planner wishes to induce homogeneous/heterogeneous behavior in a population.

Suggested Citation

  • Philip R Neary & Jonathan Newton, 2017. "Heterogeneity in preferences and behavior in threshold models," The Journal of Mechanism and Institution Design, Society for the Promotion of Mechanism and Institution Design, University of York, vol. 2(1), pages 141-159, December.
  • Handle: RePEc:jmi:articl:jmi-v2i1a5
    DOI: 10.22574/jmid.2017.12.005
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    Heterogeneity; potential; networks.;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact

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