TY  - JOUR
AU  - Heal,Geoffrey
AU  - Kunreuther,Howard
TI  - Social Reinforcement: Cascades, Entrapment and Tipping
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13579
PY  - 2007
Y2  - November 2007
UR  - http://www.nber.org/papers/w13579
L1  - http://www.nber.org/papers/w13579.pdf
N1  - Author contact info:
Geoffrey Heal
Graduate School of Business
616 Uris Hall
Columbia University
New York, NY 10027-6902
Tel: 212/854-6459
Fax: 212/316-9219
E-Mail: gmh1@columbia.edu

Howard Kunreuther
Operations and Information Management
The Wharton School
University of Pennsylvania
3730 Walnut Street, 500 JMHH
Philadelphia, PA 19104-6366
Tel: 215/898-4589
Fax: 215/573-2130
E-Mail: kunreuther@wharton.upenn.edu
AB  - There are many social situations in which the actions of different agents reinforce each other. These include network effects and the threshold models used by sociologists (Granovetter, Watts) as well as Leibenstein's "bandwagon effects." We model such situations as a game with increasing differences, and show that tipping of equilibria as discussed by Schelling, cascading and Dixit's results on clubs with entrapment are natural consequences of this mutual reinforcement. If there are several equilibria, one of which Pareto dominates, then we show that the inefficient equilibria can be tipped to the efficient one, a result of interest in the context of coordination problems.
ER  -