Culture and Communication

46 Pages Posted: 1 Nov 2018 Last revised: 10 Apr 2019

See all articles by Rajiv Sethi

Rajiv Sethi

Columbia University, Barnard College - Department of Economics; Santa Fe Institute

Muhamet Yildiz

Massachusetts Institute of Technology (MIT) - Department of Economics

Date Written: April 8, 2019

Abstract

A defining feature of culture is similarity in the manner in which information about the world is interpreted. This makes it easier to extract information from the beliefs of those within one's own group. But this information may be of low quality if better informed sources lie elsewhere. Furthermore, observing individuals outside one's group deepens our understanding not only of those individuals, but also of their culture. We model this process, using unobservable, heterogeneous priors to represent fundamental belief differences across individuals; these priors are correlated within but not across groups. We characterize long run communication patterns as follows. When uncertainty about the priors is low, there is a merging of cultures and individuals seek information wherever it is most precise. Otherwise, extreme homophily arises with positive probability, and with certainty when priors are highly correlated within groups. At moderate levels of correlation, individuals in each group can be partitioned into two categories: some individuals exhibit extreme homophily, rarely if ever stepping outside group boundaries, while others exhibit baseline homophily and seek information wherever it is most precise. The degree of homophily can vary non-monotonically with the level of correlation in priors, and small groups can exhibit heterophily at intermediate levels of correlation.

Suggested Citation

Sethi, Rajiv and Yildiz, Muhamet, Culture and Communication (April 8, 2019). Available at SSRN: https://ssrn.com/abstract=3263560 or http://dx.doi.org/10.2139/ssrn.3263560

Rajiv Sethi (Contact Author)

Columbia University, Barnard College - Department of Economics ( email )

3009 Broadway
New York, NY 10027
United States
212-854-5140 (Phone)

HOME PAGE: http://www.columbia.edu/~rs328/

Santa Fe Institute

1399 Hyde Park Road
Santa Fe, NM 87501
United States

Muhamet Yildiz

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

50 Memorial Drive
Room E52-522
Cambridge, MA 02142
United States
617-253-5331 (Phone)
617-253-6915 (Fax)

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