Integration and Diversity

Sanjeev Goyal, Penelope Hernandez, Guillem Martinez-Canovas, Frederic Moisan (), Manuel Munoz-Herrera and Angel Sanchez ()
Additional contact information
Angel Sanchez: Division of Social Science

No 20190025, Working Papers from New York University Abu Dhabi, Department of Social Science

Abstract: We study a setting where individuals prefer to coordinate with others but they differ on their preferred action. Our interest is in understanding the role of link formation with others in shaping behavior. So we consider the situation in which interactions are exogenous and a situation where individuals choose links that determine the interactions. Theory is permissive in both settings: conformity (on either of the actions) and diversity (with different groups choosing their preferred actions) are both sustainable in equilibrium. We conduct an experiment to understand how link formation affects equilibrium selection. Our experiment reveals the powerful effect of linking on equilibrium selection: with an exogenous complete network, subjects choose to conform on the majority's preferred action. By contrast, with endogenous linking { irrespective of the costs of linking- subjects always opt for diversity of actions. JEL Codes: D85, D03, C72, C92

Pages: 60 pages
Date: 2019-03, Revised 2020-09
New Economics Papers: this item is included in nep-cdm, nep-evo, nep-exp and nep-net
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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https://nyuad.nyu.edu/content/dam/nyuad/academics/ ... ers/2020/0025(1).pdf First version, 2019 (application/pdf)

Related works:
Journal Article: Integration and diversity (2021)
Working Paper: Integration and Diversity (2021)
Working Paper: Integration and diversity (2021)
Working Paper: Integration and Diversity (2017)
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