Phase Transition in a Non-Cooperative Population Game

Abstract

We analyze the random field model applied to a non-cooperative social game of binary choices, as proposed by Durlauf (1997) and Brock and Durlauf (2001), but we allow for a more generic distribution of the agents’ heterogeneity. We aim to show that their results still hold, i.e., there can be multiple equilibria when agents have some interest in adjusting their strategic behavior to that prevailing as the aggregate choice and we discuss some features such as positive feedbacks, the social multiplier, and the possibility of increasing returns on the outcomes of economic policy due to social interactions.