Communities and social inefficiency with heterogeneous groups

Alberto Dalmazzo, Paolo Pin and Diego Scalise

Journal of Economic Dynamics and Control, 2014, vol. 48, issue C, 410-427

Abstract: We present a model where society is partitioned into groups, or communities, whose preferences may conflict. In particular, the actions of members of a certain group can inflict negative spillovers on members of other groups. We show that, on one hand, coordination at the group-level may be Pareto inefficient. However, on the other hand, by using a replicator equation approach where there is some moral pressure from co-members, we show that substantial compliance to group׳s norms arises endogenously. Our framework can also account for “cultural maladaptations”, i.e., the persistence of cultural traits which are harmful for community members, and for the society as a whole.

Keywords: Group interactions; Social inefficiency; Replicator analysis (search for similar items in EconPapers)
JEL-codes: D70 Z13 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:48:y:2014:i:c:p:410-427

DOI: 10.1016/j.jedc.2014.08.001

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