Heterogeneity in Preferences and Behavior in Threshold Models

17 Pages Posted: 13 Sep 2017  

Philip Ruane Neary

Royal Holloway University of London

Jonathan Newton

Kyoto University - Institute of Economic Research

Date Written: September 8, 2017

Abstract

A coordination game is repeatedly played on a graph by players (vertices) who have heterogeneous cardinal preferences and whose strategy choice is governed by the individualistic asynchronous logit dynamic. The idea of potential driven autonomy of sets of players is used to derive results on the possibility of heterogeneous preferences leading to heterogeneous behavior. In particular, a class of graphs is identified such that for large enough graphs in this class, diversity in ordinal preferences will nearly always lead to heterogeneity in behavior, regardless of the cardinal strength of the preferences. These results have implications for network design problems, such as when a social planner wishes to induce homogeneous/heterogeneous behavior in a population.

Keywords: heterogeneity, potential, contagion, networks

JEL Classification: C73

Suggested Citation

Neary, Philip Ruane and Newton, Jonathan, Heterogeneity in Preferences and Behavior in Threshold Models (September 8, 2017). Available at SSRN: https://ssrn.com/abstract=3035289 or http://dx.doi.org/10.2139/ssrn.3035289

Philip Ruane Neary

Royal Holloway University of London ( email )

Egham
Surrey
TW20 0EX
United Kingdom

Jonathan Newton (Contact Author)

Kyoto University - Institute of Economic Research ( email )

Yoshida-Honmachi
Sakyo-ku
Kyoto 606-8501
JAPAN

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