Correlated Equilibrium, Conformity and Stereotyping in Social Groups

25 Pages Posted: 27 Oct 2012

See all articles by Edward Cartwright

Edward Cartwright

De Montfort University

Myrna H. Wooders

Vanderbilt University - College of Arts and Science - Department of Economics

Date Written: May 1, 2012

Abstract

We argue that a social norm and the coordination of behavior within social groups can be expressed by a correlated equilibrium. Given a social group structure (a partition of individuals into social groups), we propose four conditions that one may expect of a correlated equilibrium consistent with social norms. These are: (a) within-group anonymity (conformity within groups), (b) group independence (no conformity between groups), (c) homophily (individuals in the same group have similar attributes), and (d) predictable group behavior (ex-post stability). We demonstrate that correlated equilibrium satisfying (a)-(c) exist very generally and equilibrium satisfying (a)-(d) exist in games with many players. We also consider stereotyped beliefs - beliefs that all individuals in a social group can be expected to behave in the same way - and show that stereotyping is not costly to the person who stereotypes but may or may not be beneficial to society.

Keywords: correlated equilibrium, conformity, stereotyping, social groups, within-group fairness, homophily, social norms

Suggested Citation

Cartwright, Edward and Wooders, Myrna H., Correlated Equilibrium, Conformity and Stereotyping in Social Groups (May 1, 2012). Becker Friedman Institute for Research in Economics Working Paper No. 2012-014, Available at SSRN: https://ssrn.com/abstract=2167446 or http://dx.doi.org/10.2139/ssrn.2167446

Edward Cartwright

De Montfort University ( email )

The Gateway
Leicester, LE1 9BH
United Kingdom

Myrna H. Wooders (Contact Author)

Vanderbilt University - College of Arts and Science - Department of Economics ( email )

Box 1819 Station B
Nashville, TN 37235
United States

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