Chapter

Multiple Equilibria and Bootstrapping Performance

Geoffrey Brennan and Philip Pettit

in The Economy of Esteem

Published in print March 2004 | ISBN: 9780199246489
Published online November 2004 | e-ISBN: 9780191601460 | DOI: http://dx.doi.org/10.1093/0199246483.003.0008
Multiple Equilibria and Bootstrapping Performance

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Sometimes esteem (or disesteem) is assigned by reference not to quality of performance but rather to whether the actor has acted in accordance with some norm. Feedback effects can arise in this case as well, because the amount of esteem/disesteem assigned for compliance/non-compliance is likely to be a function of the number of conformers. Equilibrium analysis is undertaken for this case. A distinctive feature is that there are likely to be two possible stable equilibria: one a positive esteem, low-compliance equilibrium and the other a disesteem, high compliance equilibrium. The multiple equilibria property raises the question of ‘boot strapping’ from the lower to the higher equilibrium. We investigate that possibility in the context of a more general comparative static analysis.

Keywords: boot strapping; compliance levels; multiple equilibria; norms

Chapter.  5667 words.  Illustrated.

Subjects: Microeconomics

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