Individual Preferences and Conflict
In many situations we want to choose similarly to others, such as buying the same technology our colleagues buy to be compatible, or going to the same social events as our friends for it makes us happier than going out without them. But, when there are different choices to make it is not evident what one should choose. This is specially prominent when people prefer different options to those of their friends. That is, preferences are in conflict. In this project we investigate how conflicts in preferences affect peoples choices to relate between them, and how the relation between preferences and pressure (influence) from those around us shape our behavior.
This project has lead to two papers. A theoretical paper (Heterogeneous Network Games: Conflicting Preferences) and an experimental paper (Conflict and segregation in networks: An experiment on the interplay between individual preferences and social influence). You can see more details below.
Heterogeneous Network Games: Conflicting Preferences
with Penélope Hernández & Ángel Sánchez
Abstract: In many economic situations, a player pursues coordination or anti-coordination with her neighbors on a network, but she also has intrinsic preferences among the available options. We here introduce a model which allows to analyze this issue by means of a simple framework in which players endowed with an idiosyncratic identity interact on a social network through strategic complements or substitutes. We classify the possible types of Nash equilibria under complete information, finding two thresholds for switching action that relate to the two player setup of the games. This rich structure of equilibria is considerably reduced when turning to incomplete information, in a setup in which players only know the distribution of the number of neighbors of the network. For high degrees of heterogeneity in the population the equilibria is such that every player can choose her preferred action, whereas if one of the identities is in the minority frustration ensues.
Click on the image to load a simulation of the model.
Conflict and segregation in networks: An experiment on the interplay between individual preferences and social influence
with Penélope Hernández, Guillem Mártínez-Cánovas & Lea Ellwardt
Abstract: We examine how agents form networks in the presence of idiosyncratic differences in their pref- erences. Agents have preferences over which behavior to adopt from a binary choice set. Specif- ically, groups of agents play a two-stage network game with strategic complementarities. In the first stage, affiliation, the network structure is endogenously determined through a non- cooperative proposal game. In the second stage, behavior adoption, agents play a coordination game against all of their network neighbors. Our aim is to understand theoretically and exper- imentally how different levels of conflict in individual preferences affect the choices of affiliation and behavior adoption in equilibrium. We find that, in accordance to the theoretical literature, payoff efficiency is always salient when networks are endogenously formed and subjects’ pref- erences are aligned. When conflict in preferences is introduced, the risk dominant equilibrium becomes the most salient.
Photos from the experimental sessions at Lineex (UV) in Valencia, Spain.