Program on Political Economy Seminar

Today's presenter: Garance Genicot (Georgetown), "Tolerance and Compromise in Social Networks"

Abstract: 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.

All interested faculty and students are invited to attend. 

Co-sponsored by FAS and IQSS, the Program on Political Economy (PE) supports research-related activities that integrate the study of economics and politics, whether by studying economic behavior in the political process or political behavior in the marketplace. In general, positive political economy is concerned with showing how observed differences among institutions affect political and economic outcomes in various social, economic, and political systems and how the institutions themselves change and develop in response to individual and collective beliefs, preferences, and strategies.