IDEAS home Printed from https://ideas.repec.org/p/van/wpaper/0806.html
   My bibliography  Save this paper

Conformity, Equity and Correlated Equilibrium

Author

Listed:
  • Edward Cartwright

    (Department of Economics, Keynes College, University of Kent)

  • Myrna Wooders

    (Department of Economics, Vanderbilt University)

Abstract

We explore the potential for correlated equilibrium to capture conformity to norms and the coordination of behavior within social groups. Given a partition of players into social groups we propose three properties one may expect of a correlated equilibrium: within-group anonymity, group independence and stereotyped beliefs. Within-group anonymity requires that players within the same social group have equal opportunities and equal payoffs. Group independence requires that there be no correlation of behavior between groups. If beliefs are stereotyped then any two members of a social group are expected to behave identically. We demonstrate that there are subjective correlated equilibrium satisfying within-group anonymity, group independence and stereotyping. We also discuss the efficiency of stereotyping; an individual player does not loose significantly from stereotyping others.. Our results apply when players within social groups are 'similar', and not necessarily identical. A number of related issues, such as fairness, are also discussed.

Suggested Citation

  • Edward Cartwright & Myrna Wooders, 2008. "Conformity, Equity and Correlated Equilibrium," Vanderbilt University Department of Economics Working Papers 0806, Vanderbilt University Department of Economics.
    • Handle: RePEc:van:wpaper:0806
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/pubs/VUECON/vu08-w06.pdf
    File Function: First version, 2008
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Alberto Alesina & Enrico Spolaore, 1997. "On the Number and Size of Nations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1027-1056.
    2. Aumann, Robert J, 1987. "Correlated Equilibrium as an Expression of Bayesian Rationality," Econometrica, Econometric Society, vol. 55(1), pages 1-18, January.
    3. Aumann, Robert J., 1974. "Subjectivity and correlation in randomized strategies," Journal of Mathematical Economics, Elsevier, vol. 1(1), pages 67-96, March.
    4. Adam Brandenburger & Eddie Dekel, 2014. "Rationalizability and Correlated Equilibria," World Scientific Book Chapters, in: The Language of Game Theory Putting Epistemics into the Mathematics of Games, chapter 3, pages 43-57, World Scientific Publishing Co. Pte. Ltd..
    5. Bernheim, B Douglas, 1994. "A Theory of Conformity," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 841-877, October.
    6. George A. Akerlof, 1980. "A Theory of Social Custom, of which Unemployment may be One Consequence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(4), pages 749-775.
    7. Binmore, Ken, 1989. "Social Contract I: Harsani and Rawls," Economic Journal, Royal Economic Society, vol. 99(395), pages 84-102, Supplemen.
    8. George A. Akerlof & Rachel E. Kranton, 2000. "Economics and Identity," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 715-753.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Edward Cartwright & Myrna Wooders, 2008. "Behavioral Properties of Correlated Equilibrium; Social Group Structures with Conformity and Stereotyping," Vanderbilt University Department of Economics Working Papers 0814, Vanderbilt University Department of Economics.
    2. Edward Cartwright & Myrna Wooders, 2014. "Correlated Equilibrium, Conformity, and Stereotyping in Social Groups," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 16(5), pages 743-766, October.
    3. Edward Cartwright & Myrna Wooders, 2014. "Correlated Equilibrium, Conformity, and Stereotyping in Social Groups," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 16(5), pages 743-766, October.
    4. Willemien Kets & Alvaro Sandroni, 2021. "A Theory of Strategic Uncertainty and Cultural Diversity," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(1), pages 287-333.
    5. Collewet, M.M.F. & de Grip, A. & Koning, J.d., 2015. "Peer working time, labour supply, and happiness for male workers," ROA Research Memorandum 006, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    6. Pritha Dev & Blessing U. Mberu & Roland Pongou, 2016. "Ethnic Inequality: Theory and Evidence from Formal Education in Nigeria," Economic Development and Cultural Change, University of Chicago Press, vol. 64(4), pages 603-660.
    7. An, Jiafu & Jiang, Mengfei & Xu, Jiaman, 2021. "Professional norms and risk-taking of bank employees: Do expectations of peers’ risk preferences matter?," Journal of Financial Stability, Elsevier, vol. 56(C).
    8. Dekel, Eddie & Fudenberg, Drew, 1990. "Rational behavior with payoff uncertainty," Journal of Economic Theory, Elsevier, vol. 52(2), pages 243-267, December.
    9. Collewet, Marion & de Grip, Andries & de Koning, Jaap, 2017. "Conspicuous work: Peer working time, labour supply, and happiness," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 68(C), pages 79-90.
    10. Fabrizio Germano & Peio Zuazo-Garin, 2017. "Bounded rationality and correlated equilibria," International Journal of Game Theory, Springer;Game Theory Society, vol. 46(3), pages 595-629, August.
    11. Claudia Olivetti & Eleonora Patacchini & Yves Zenou, 2020. "Mothers, Peers, and Gender-Role Identity," Journal of the European Economic Association, European Economic Association, vol. 18(1), pages 266-301.
    12. Oyama, Daisuke & Tercieux, Olivier, 2010. "Robust equilibria under non-common priors," Journal of Economic Theory, Elsevier, vol. 145(2), pages 752-784, March.
    13. Fabrizio Germano & Peio Zuazo-Garin, 2012. "Approximate Knowledge of Rationality and Correlated Equilibria," Discussion Paper Series dp610, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
    14. Amanda Friedenberg, 2006. "Can Hidden Variables Explain Correlation? (joint with Adam Brandenburger)," Theory workshop papers 815595000000000005, UCLA Department of Economics.
    15. Hillas, John & Samet, Dov, 2022. "Non-Bayesian correlated equilibrium as an expression of non-Bayesian rationality," Games and Economic Behavior, Elsevier, vol. 135(C), pages 1-15.
    16. Khan, M. Ali & Rath, Kali P. & Sun, Yeneng & Yu, Haomiao, 2013. "Large games with a bio-social typology," Journal of Economic Theory, Elsevier, vol. 148(3), pages 1122-1149.
    17. Harminder Battu & McDonald Mwale & Yves Zenou, 2007. "Oppositional identities and the labor market," Journal of Population Economics, Springer;European Society for Population Economics, vol. 20(3), pages 643-667, July.
    18. Friedman, Daniel & Rabanal, Jean Paul & Rud, Olga A. & Zhao, Shuchen, 2022. "On the empirical relevance of correlated equilibrium," Journal of Economic Theory, Elsevier, vol. 205(C).
    19. Dimant, Eugen, 2015. "On Peer Effects: Behavioral Contagion of (Un)Ethical Behavior and the Role of Social Identity," MPRA Paper 68732, University Library of Munich, Germany.
    20. Cartwright, Edward & Wooders, Myrna, 2004. "Correlated equilibrium and behavioral conformity," Economic Research Papers 269625, University of Warwick - Department of Economics.

    More about this item

    Keywords

    Conformity; equity; stereotyping; correlated equilibrium; stereotyped beliefs; subjective correlated equilibrium;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:van:wpaper:0806. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: John P. Conley (email available below). General contact details of provider: http://www.vanderbilt.edu/econ/wparchive/index.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.