Social multipliers can be thought of as indicators of the degree of strategic complementarity among interacting agents. A simple choice model is used to derive a formal expression of the social multiplier. The behaviour of the multiplier is described in relation to various factors, such as the strength of complementarity and topology of social interactions. Social multipliers are shown to help explain behaviours, such as criminal activity and labour participation, which vary greatly across social groups or across time out of proportion to variation in fundamentals. Challenges associated with identification of social multipliers are also discussed.
KeywordsComparative statics Continuous and discrete choice models Identification Multiple equilibria Regression-based estimation Selection bias Social interactions Social multipliers Social norms Strategic complementarity
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