Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Social Reinforcement: Cascades, Entrapment, and Tipping

Social Reinforcement: Cascades, Entrapment, and Tipping Abstract The actions of different agents sometimes reinforce each other. Examples are network effects and the threshold models used by sociologists as well as (Harvey) Leibenstein's “bandwagon effects.” We model such situations as a game with increasing differences, and show that tipping of equilibria, cascading, and clubs with entrapment are natural consequences of this mutual reinforcement. If there are several equilibria, one of which Pareto dominates, then the inefficient equilibria can be tipped to the efficient one, a result of interest in the context of coordination problems. We characterize the smallest tipping set. (JEL C72 , D80 , D85 , Z13 ) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Journal: Microeconomics American Economic Association

Social Reinforcement: Cascades, Entrapment, and Tipping

Loading next page...
 
/lp/american-economic-association/social-reinforcement-cascades-entrapment-and-tipping-F6Fu6iEYun
Publisher
American Economic Association
Copyright
Copyright © 2010 by the American Economic Association
Subject
Articles
ISSN
1945-7685
eISSN
1945-7685
DOI
10.1257/mic.2.1.86
Publisher site
See Article on Publisher Site

Abstract

Abstract The actions of different agents sometimes reinforce each other. Examples are network effects and the threshold models used by sociologists as well as (Harvey) Leibenstein's “bandwagon effects.” We model such situations as a game with increasing differences, and show that tipping of equilibria, cascading, and clubs with entrapment are natural consequences of this mutual reinforcement. If there are several equilibria, one of which Pareto dominates, then the inefficient equilibria can be tipped to the efficient one, a result of interest in the context of coordination problems. We characterize the smallest tipping set. (JEL C72 , D80 , D85 , Z13 )

Journal

American Economic Journal: MicroeconomicsAmerican Economic Association

Published: Feb 1, 2010

There are no references for this article.