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Social Reinforcement : Cascades, Entrapment and Tipping

Author: G M Heal; Howard Kunreuther
Publisher: Cambridge, Mass. National Bureau of Economic Research 2007.
Series: Working paper series (National Bureau of Economic Research), no. w13579.
Edition/Format:   eBook : Document : EnglishView all editions and formats
Summary:
There are many social situations in which the actions of different agents reinforce each other. These include network effects and the threshold models used by sociologists (Granovetter, Watts) as well as Leibenstein's "bandwagon effects." We model such situations as a game with increasing differences, and show that tipping of equilibria as discussed by Schelling, cascading and Dixit's results on clubs with  Read more...
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Details

Material Type: Document, Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: G M Heal; Howard Kunreuther
OCLC Number: 1027312982
Notes: November 2007.
Description: 1 online resource.
Details: Mode of access: World Wide Web.
Series Title: Working paper series (National Bureau of Economic Research), no. w13579.
Responsibility: Geoffrey Heal, Howard Kunreuther.

Abstract:

There are many social situations in which the actions of different agents reinforce each other. These include network effects and the threshold models used by sociologists (Granovetter, Watts) as well as Leibenstein's "bandwagon effects." We model such situations as a game with increasing differences, and show that tipping of equilibria as discussed by Schelling, cascading and Dixit's results on clubs with entrapment are natural consequences of this mutual reinforcement. If there are several equilibria, one of which Pareto dominates, then we show that the inefficient equilibria can be tipped to the efficient one, a result of interest in the context of coordination problems.

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