The actions of different agents sometimes reinforce each other.
Examples are network effects and the threshold models used by sociologists
as well as (Harvey) Leibenstein's "bandwagon effects." We
model such situations as a game with increasing differences, and
show that tipping of equilibria, cascading, and clubs with entrapment
are natural consequences of this mutual reinforcement. If there
are several equilibria, one of which Pareto dominates, then the inefficient
equilibria can be tipped to the efficient one, a result of interest
in the context of coordination problems. We characterize the smallest
tipping set. (JEL C72, D80, D85, Z13)
Heal, Geoffrey, and Howard Kunreuther.
"Social Reinforcement: Cascades, Entrapment, and Tipping."
American Economic Journal: Microeconomics,
Information, Knowledge, and Uncertainty: General
Network Formation and Analysis: Theory
Economic Sociology; Economic Anthropology; Social and Economic Stratification