Social reinforcement
Subtitle: cascades, entrapment and tipping
By: Geoffrey Heal, Howard Kunreuther.
Contributors: Kunreuther, Howard.; National Bureau of Economic Research.
Series: NBER working paper series -- no. 13579.; Working paper series (National Bureau of Economic Research) -- working paper no. 13579.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, Mass
Language: eng
Number of pages: 18
Subjects: Social groups -- Economic aspects; Equilibrium (Economics)
Description: 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.
Notes: "November 2007"

Includes bibliographical references (p. 16-18).

Also available in PDF from the NBER world wide web site (www.nber.org).