Social Interactions in Economic Theory: An Insight from Statistical Mechanics

This Chapter extends some economic models that take advantage of a formalism inspired from statistical mechanics to account for social influence in individual decisions. Starting with a framework suggested by Durlauf, Blume and Brock, we introduce three classes of models shifting progressively from rational towards adaptive expectations. We discuss the risk and opportunity of transposing the tools, methods and concepts from statistical mechanics to economics. We also analyze some issues seldom addressed, such as a comparison between two models of heterogeneous idiosyncratic preferences, corresponding to cases with quenched and annealed disorder in statistical physics, respectively.

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