Tolerance and herd behavior

Sophistication of ideas under payoff complementarity

Research output: Contribution to journalArticle

Abstract

In this paper, I first show that there may be inefficient herd behavior even with a continuous choice set and a continuous loss function if there is payoff complementarity. Then, I show that the probability of inefficient herd behavior is asymptotically zero and the choice sequence converges to the optimal one almost surely if people have even a small amount of tolerance that they are willing to accept one another as a partner in joint work. This result is closely related to the argument in J. S. Mill's On Liberty, where he states that tolerance for others' ideas is essential for sophistication of ideas.

Original languageEnglish
Pages (from-to)539-554
Number of pages16
JournalJournal of Public Economic Theory
Volume13
Issue number4
DOIs
Publication statusPublished - 2011 Aug
Externally publishedYes

Fingerprint

tolerance
Tolerance
Herd behavior
Sophistication
Complementarity
Liberty
Loss function
John Stuart Mill
Choice sets

ASJC Scopus subject areas

  • Economics and Econometrics
  • Finance
  • Sociology and Political Science

Cite this

Tolerance and herd behavior : Sophistication of ideas under payoff complementarity. / Oikawa, Koki.

In: Journal of Public Economic Theory, Vol. 13, No. 4, 08.2011, p. 539-554.

Research output: Contribution to journalArticle

@article{344967173985482f99b59382f9059a43,
title = "Tolerance and herd behavior: Sophistication of ideas under payoff complementarity",
abstract = "In this paper, I first show that there may be inefficient herd behavior even with a continuous choice set and a continuous loss function if there is payoff complementarity. Then, I show that the probability of inefficient herd behavior is asymptotically zero and the choice sequence converges to the optimal one almost surely if people have even a small amount of tolerance that they are willing to accept one another as a partner in joint work. This result is closely related to the argument in J. S. Mill's On Liberty, where he states that tolerance for others' ideas is essential for sophistication of ideas.",
author = "Koki Oikawa",
year = "2011",
month = "8",
doi = "10.1111/j.1467-9779.2011.01509.x",
language = "English",
volume = "13",
pages = "539--554",
journal = "Journal of Public Economic Theory",
issn = "1467-9779",
publisher = "Wiley-Blackwell",
number = "4",

}

TY - JOUR

T1 - Tolerance and herd behavior

T2 - Sophistication of ideas under payoff complementarity

AU - Oikawa, Koki

PY - 2011/8

Y1 - 2011/8

N2 - In this paper, I first show that there may be inefficient herd behavior even with a continuous choice set and a continuous loss function if there is payoff complementarity. Then, I show that the probability of inefficient herd behavior is asymptotically zero and the choice sequence converges to the optimal one almost surely if people have even a small amount of tolerance that they are willing to accept one another as a partner in joint work. This result is closely related to the argument in J. S. Mill's On Liberty, where he states that tolerance for others' ideas is essential for sophistication of ideas.

AB - In this paper, I first show that there may be inefficient herd behavior even with a continuous choice set and a continuous loss function if there is payoff complementarity. Then, I show that the probability of inefficient herd behavior is asymptotically zero and the choice sequence converges to the optimal one almost surely if people have even a small amount of tolerance that they are willing to accept one another as a partner in joint work. This result is closely related to the argument in J. S. Mill's On Liberty, where he states that tolerance for others' ideas is essential for sophistication of ideas.

UR - http://www.scopus.com/inward/record.url?scp=79960447169&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=79960447169&partnerID=8YFLogxK

U2 - 10.1111/j.1467-9779.2011.01509.x

DO - 10.1111/j.1467-9779.2011.01509.x

M3 - Article

VL - 13

SP - 539

EP - 554

JO - Journal of Public Economic Theory

JF - Journal of Public Economic Theory

SN - 1467-9779

IS - 4

ER -