People tend, in many ways, to behave like the others they see around them. This note´shows that such reference group behavior tends to reinforce incentives (economic or other) that influence individuals directly only marginally. The workings or such incentives is augmented what might be called...

These notes, published in 1981, introduce the concept of the social multiplier: If the behavior of agents is positively influenced by what members of their reference group do, this enhances the power of economic incentives.