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Global Social Interactions with Sequential Binary Decisions: The Case of Marriage, Divorce, and Stigma

Author

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  • Finn Christensen

    (Department of Economics, Towson University)

  • Juergen Jung

    (Department of Economics, Towson University)

Abstract

This paper studies global social interactions in a stylized model of marriage and divorce with complementarities across agents. The key point of departure from traditional models of social interactions is that actions are interrelated and sequential. We establish existence and uniqueness results akin to those in traditional models. In contrast to these models, however, we show that the presence of strategic complementarities is no longer sufficient to generate a social multiplier that exceeds one in this environment. Self-fulfilling conformity, whereby a greater desire to conform at the individual level leads to greater homogeneity of choices in the aggregate, is not retained either. Some empirical implications are also discussed.

Suggested Citation

  • Finn Christensen & Juergen Jung, 2010. "Global Social Interactions with Sequential Binary Decisions: The Case of Marriage, Divorce, and Stigma," Working Papers 2010-01, Towson University, Department of Economics, revised Jan 2010.
  • Handle: RePEc:tow:wpaper:2010-01
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    References listed on IDEAS

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    1. Fujimoto, Takao, 1986. "Global asymptotic stability of non-linear difference equations," Economics Letters, Elsevier, vol. 22(2-3), pages 247-250.
    2. Piero Cipollone & Alfonso Rosolia, 2007. "Social Interactions in High School: Lessons from an Earthquake," American Economic Review, American Economic Association, vol. 97(3), pages 948-965, June.
    3. William A. Brock & Steven N. Durlauf, 2001. "Discrete Choice with Social Interactions," Review of Economic Studies, Oxford University Press, vol. 68(2), pages 235-260.
    4. Esther Duflo & Emmanuel Saez, 2003. "The Role of Information and Social Interactions in Retirement Plan Decisions: Evidence from a Randomized Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 118(3), pages 815-842.
    5. Armin Falk & Andrea Ichino, 2006. "Clean Evidence on Peer Effects," Journal of Labor Economics, University of Chicago Press, vol. 24(1), pages 39-58, January.
    6. DeCicca, Philip & Kenkel, Don & Mathios, Alan, 2008. "Cigarette taxes and the transition from youth to adult smoking: Smoking initiation, cessation, and participation," Journal of Health Economics, Elsevier, vol. 27(4), pages 904-917, July.
    7. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877.
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    Cited by:

    1. Finn Christensen, 2014. "Comparative Statics, Stability, and Uniqueness," Working Papers 2014-02, Towson University, Department of Economics, revised Mar 2015.

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    More about this item

    Keywords

    Social interactions; social multiplier; self-fulfilling conformity; uniqueness under moderate social influence.;
    All these keywords.

    JEL classification:

    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

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