Tolerance and Compromise in Social Networks

Garance Genicot

NBER Working Paper No. 25506
Issued in January 2019
NBER Program(s):Political Economy Program

In this paper, individuals are characterized by their identity — an ideal code of conduct — and by a level of tolerance for behaviors that differ from their own ideal. Individuals first choose their behavior, then form social networks. This paper studies the possibility of compromise, i.e. individuals choosing a behavior different from their ideal point, in order to be accepted by others, to "belong.'' I first show that when tolerance levels are the same in society, compromise is impossible: individuals all choose their preferred behavior and form friendships only with others whose ideal point belong to their tolerance window. In contrast, I show that heterogeneity in tolerance allows for compromise in equilibrium. Moreover, if identity and tolerance are independently distributed, any equilibrium involves some compromise.

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Document Object Identifier (DOI): 10.3386/w25506