Social Reinforcement: Cascades, Entrapment and Tipping

Geoffrey Heal and Howard Kunreuther

No 13579, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: D20 D80 D85 Q59 (search for similar items in EconPapers)
Date: 2007-11
New Economics Papers: this item is included in nep-evo and nep-net
Note: EEE PE
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Citations: View citations in EconPapers (1)

Published as Geoffrey Heal & Howard Kunreuther, 2010. "Social Reinforcement: Cascades, Entrapment, and Tipping," American Economic Journal: Microeconomics, American Economic Association, vol. 2(1), pages 86-99, February.

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Journal Article: Social Reinforcement: Cascades, Entrapment, and Tipping (2010)
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