social interactions (theory)

José A. Scheinkman
From The New Palgrave Dictionary of Economics, Second Edition, 2008
Edited by Steven N. Durlauf and Lawrence E. Blume
Back to top

Abstract

Social interactions refer to particular forms of externalities, in which the actions of a reference group affect an individual's preferences. In the presence of strategic complementarities, social interactions help reconcile the observation of large differences in outcomes in the absence of commensurate differences in fundamentals. This article surveys the theoretical literature and discusses different approaches to estimating social interactions.
Back to top

Keywords

conspicuous consumption; critical mass model; discrete choice models; interactive particle system; multiple equilibria; neighbours and neighbourhoods; network formation; non-market interactions; peer groups; Public Use Microsample Area (PUMA); random field model; residential segregation; Schelling, T.; social interactions; social learning; social multiplier; spatial clustering; statistical mechanics; strategic complementarities; tipping models; urban agglomeration; Veblen, T.
Back to top

Article

Back to top

See Also

Research supported by the National Science Foundation through grant SES 0350770. I thank Alberto Bisin, Aureo de Paula, Ed Glaeser, and Yannis Ioannides for comments.
Back to top

How to cite this article

Scheinkman, José A. "social interactions (theory)." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 19 June 2013 <http://www.dictionaryofeconomics.com/article?id=pde2008_T000200> doi:10.1057/9780230226203.1558

Download Citation:

as RIS | as text | as CSV | as BibTex