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The Emergence of Local Norms in Networks

Author

Listed:
  • Mary A. Burke

    (Federal Reserve Bank of Boston)

  • Gary M. Fournier

    (Florida State University)

  • Kislaya Prasad

    (R. H. Smith School of Business, University of Maryland)

Abstract

We develop an explanation of the emergence of local norms, and theassociated phenomenon of geographical variation in behavior.Individuals are assumed to interact locally with neighbors in anenvironment with a network externality. Although many patterns ofbehavior are possible, the dispersed interactive choices of agentsare shown to select behavior that is locally uniform but globallydiverse. The range of applications of the theory includes regionalvariation in the practice of medicine, technology choice, andcorruption. The framework is also useful for further developing ourunderstanding of important phenomena like lock-in, criticalthresholds, and contagion.

Suggested Citation

  • Mary A. Burke & Gary M. Fournier & Kislaya Prasad, 2006. "The Emergence of Local Norms in Networks," Working Papers wp2006_02_01, Department of Economics, Florida State University.
    • Handle: RePEc:fsu:wpaper:wp2006_02_01
    Note: This paper has been accepted in Complexity journal (http://www3.interscience.wiley.com/cgi-bin/jhome/38804) and is not available on-line from RePEc.
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    Cited by:

    1. Burke, Mary A. & Fournier, Gary M. & Prasad, Kislaya, 2010. "Geographic variations in a model of physician treatment choice with social interactions," Journal of Economic Behavior & Organization, Elsevier, vol. 73(3), pages 418-432, March.

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    Keywords

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    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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