Global social interactions with sequential binary decisions: the case of marriage, divorce, and stigma
Links to Fileshttps://ideas.repec.org/p/tow/wpaper/2010-01.html
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Type of Workapplication/pdf
DepartmentTowson University. Department of Economics
Citation of Original PublicationFinn Christensen & Juergen Jung, 2010. "Global Social Interactions with Sequential Binary Decisions: The Case of Marriage, Divorce, and Stigma," Working Papers 2010-01, Towson University, Department of Economics, revised Jan 2010.
Uniqueness under moderate social influence
This paper studies global social interactions in a stylized model of marriage and divorce with complementarities across agents. The key point of departure from traditional models of social interactions is that actions are interrelated and sequential. We establish existence and uniqueness results akin to those in traditional models. In contrast to these models, however, we show that the presence of strategic complementarities is no longer sufficient to generate a social multiplier that exceeds one in this environment. Self-fulfilling conformity, whereby a greater desire to conform at the individual level leads to greater homogeneity of choices in the aggregate, is not retained either. Some empirical implications are also discussed.