Equilibrium Properties of Status Seeking and Conformism

Abstract

The article examines the relation between the heterogeneity of individuals and the distribution of their actions, for the case where individuals compare themselves to others. Two types of social comparison are studied: status seeking and conformism. Both are modelled as an implicit contest where individuals get higher reputation only if they surpass other people. In the status model, reputation increases with the fraction of people who take a lower action. In the conformist model, reputation increases with the fraction of people who take actions with a larger distance to the norm. Both types of social comparison may generate multiple equilibria with action distributions, even if individuals are homogeneous. If individuals are heterogeneous, in general only equilibria with one or two actions exist. Such clustering probably agrees with empirical observations of status seeking and conformism.