Seeking Harmony Amidst Diversity : Consensus Building with Network Externalities

Chen, Chia-Hui; Ishida, Junichiro

Institute of Social and Economic Research Discussion Papers, 2011, 826

Number of Access:480（2025-11-04 06:11 Counts）

Identifier to cite or link to this item: https://hdl.handle.net/11094/13617

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Title
Seeking Harmony Amidst Diversity : Consensus Building with Network Externalities
Creator
NRID
1000020768238 1000020768238
CreatorName
Chen, Chia-Hui
NRID
1000040324222 1000040324222
ORCID
0000-0002-0674-0216 0000-0002-0674-0216
researchmap permalink
read0116302 read0116302
Scopus Author ID
36927932200 36927932200
CreatorName
Ishida, Junichiro
Abstract
A group of individuals, with a potential conflict of interest, face a choice amongalternatives. There is a network externality such that the chosen alternative yields valueonly if sufficiently many individuals get on board. Their preferences for each alternativeand the benefit derived from a successfully formed network are known only privately andmight vary between the players who determine whether to make their choices early orlate. We characterize the equilibrium timing of adoption as well as the efficient timingwhich maximizes the total expected payoff. We also show that the efficient timing ofadoption can be implemented by a simple fee scheme. The analysis gives an insight intowhy consensus is often hard-won in some societies and suggests a potential role of socialnorms in improving the efficiency.
Publisher
The Institute of Social and Economic Research, Osaka University
Source Title
Institute of Social and Economic Research Discussion Papers
Volume (Issue)
826
Date of Issued
2011-12
Language
English
Handle URL
https://hdl.handle.net/11094/13617
Relation.references
URI
https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2011/DP0826.pdf
Access Rights
metadata only access
Category
ディスカッション／ワーキング・ペーパー DP/WP
Institute of Social and Economic Research Discussion Papers