Dispersed Behavior and Perceptions in Assortative Societies

Mira Frick (), Ryota Iijima () and Yuhta Ishii ()
Additional contact information
Mira Frick: Cowles Foundation, Yale University
Ryota Iijima: Cowles Foundation, Yale University, https://economics.yale.edu/people/faculty/ryota-iijima

No 2128R, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: We take an equilibrium-based approach to study the interplay between behavior and misperceptions in coordination games with assortative interactions. Our focus is assortativity neglect, where agents fail to take into account the extent of assortativity in society. We show, first, that assortativity neglect amplifies action dispersion, both in fixed societies and by exacerbating the effect of social changes. Second, unlike other misperceptions, assortativity neglect is a misperception that agents can rationalize in any true environment. Finally, assortativity neglect provides a lens through which to understand how empirically documented misperceptions about distributions of population characteristics (e.g., income inequality) vary across societies.

Keywords: Assortativity neglect; Coordination games; Self-confirming equilibrium; Misperception (search for similar items in EconPapers)
JEL-codes: C70 D80 D85 (search for similar items in EconPapers)
Pages: 68 pages
Date: 2018-04, Revised 2019-03
New Economics Papers: this item is included in nep-gth and nep-mic
Note: Includes Supplimental Material
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Working Paper: Dispersed Behavior and Perceptions in Assortative Societies (2021)
Working Paper: Dispersed Behavior and Perceptions in Assortative Societies (2021)
Working Paper: Dispersed Behavior and Perceptions in Assortative Societies (2018)
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