Social interaction and conformism in a random utility model

Emilio Barucci and Marco Tolotti

Journal of Economic Dynamics and Control, 2012, vol. 36, issue 12, 1855-1866

Abstract: 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.

Keywords: Conformism; Continuous time Markov chains; Mean field interaction; Random utility models; Social interaction (search for similar items in EconPapers)
JEL-codes: C62 D71 D81 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:36:y:2012:i:12:p:1855-1866

DOI: 10.1016/j.jedc.2012.06.005

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