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Decisions in Economics and Finance

, Volume 41, Issue 2, pp 427–445 | Cite as

Reference group influence on binary choices dynamics

  • Arianna Dal FornoEmail author
  • Ugo Merlone
Article
  • 40 Downloads

Abstract

The recent literature has analyzed binary choices dynamics providing interesting results. Most of these contributions consider interactions within a single group. Nevertheless, in some situations the interaction takes place not only within a single group but also between different groups. In this paper, we investigate the choice dynamics when considering two populations where one serves as a reference group. Considering this influence effect enriches the dynamics. Although the structurally stable resulting dynamics are attracting cycles only, with any positive integer period, the reference group makes the dynamics of the influenced population much more complex. We considered both the possibility that the reference group has the same or the opposite attitude toward the distribution over the choices. We show how the dynamics and the bifurcation structure are modified under the influence of the reference group. Our results illustrate how the propensity to switch choices in the reference groups may, indirectly, affect choices in the first group.

Keywords

Discontinuous 2-dim maps Border-collision bifurcations Periodicity tongues Influence Reference group Binary choices 

JEL Classification

C31 C72 C73 D91 

Notes

Acknowledgements

The authors are grateful to Marina Nuciari, for helpful suggestions and constructive discussions. Usual caveats apply.

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Copyright information

© Associazione per la Matematica Applicata alle Scienze Economiche e Sociali (AMASES) 2018

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of MoliseCampobassoItaly
  2. 2.Department of Psychology, Center for Logic, Language, and CognitionUniversity of TorinoTorinoItaly

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