Social interaction and conformism in a random utility model

We analyze a class of dynamic binary choice models with social interaction. Agents are heterogeneous and their degree of conformism (taste externality) changes over time endogenously. We show that social interaction in itself is not enough to observe multiple equilibria and that the equilibrium outcome is not necessarily a polarized society. The social outcome depends on the law of motion that drives the evolution of taste externality.

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Year of publication:	2012
Authors:	Barucci, Emilio ; Tolotti, Marco
Published in:	Journal of Economic Dynamics and Control. - Elsevier, ISSN 0165-1889. - Vol. 36.2012, 12, p. 1855-1866
Publisher:	Elsevier
Subject:	Conformism \| Continuous time Markov chains \| Mean field interaction \| Random utility models \| Social interaction

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Type of publication:	Article
Classification:	D71 - Social Choice; Clubs; Committees; Associations ; D81 - Criteria for Decision-Making under Risk and Uncertainty ; C62 - Existence and Stability Conditions of Equilibrium
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010871056