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Discrete Choice with Social Interactions
Abstract
This paper provides an analysis of aggregate behavioural outcomes when individual utility exhibits social interaction effects. We study generalized logistic models of individual choice which incorporate terms reflecting the desire of individuals to conform to the behaviour of others in an environment of noncooperative decisionmaking. Laws of large numbers are generated in such environments. Multiplicity of equilibria in these models, which are equivalent to the existence of multiple self-consistent means for average choice behaviour, will exist when the social interactions exceed a particular threshold. Local stability of these multiple equilibria is also studied. The properties of the noncooperative economy are contrasted with the properties of an economy in which a social planner determines the set of individual choices. Finally, a likelihood function based on the theoretical model is given and conditions for the econometric identifiability of the model are established.
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Cites
Becker, G. S. (1996) · doi:10.4159/9780674020658 · Cited by 1,379
Cited by
Mas, A., & Moretti, E. (2009) · American Economic Review · doi:10.1257/aer.99.1.112 · Cited by 1,280
Distinguishing influence-based contagion from homophily-driven diffusion in dynamic networks
Aral, S., Muchnik, L., & Sundararajan, A. (2009) · Proceedings of the National Academy of Sciences · doi:10.1073/pnas.0908800106 · Cited by 1,207
Power Laws in Economics and Finance
Gabaix, X. (2009) · Annual Review of Economics · doi:10.1146/annurev.economics.050708.142940 · Cited by 907
Re‐theorizing Family Demographics
Esping‐Andersen, G., & Billari, F. C. (2015) · Population and Development Review · doi:10.1111/j.1728-4457.2015.00024.x · Cited by 763
Young, H. P. (2015) · Annual Review of Economics · doi:10.1146/annurev-economics-080614-115322 · Cited by 497
Metadata
- Authors
- Brock, W. A., & Durlauf, S. N.
- Venue
- The Review of Economic Studies
- Publisher
- Oxford University Press (OUP)
- Published
- 2001-04-01
- Volume
- 68
- Issue
- 2
- Pages
- 235-260
- ISSN
- 0034-6527 (ISSN-L)
- 1467-937X
- OpenAlex
- W2145212723
- Cited by
- 1,664
- References
- 1
- FWCI
- 62.57
- Type
- journal article
- Language
- en
- Open access
- closed
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
