Non-equilibrium time-dependent solution to discrete choice with social interactions.

ABSTRACT: We solve the binary decision model of Brock and Durlauf (2001) in time using a method reliant on the resolvent of the master operator of the stochastic process. Our solution is valid when not at equilibrium and can be used to exemplify path-dependent behaviours of the binary decision model. The solution is computationally fast and is indistinguishable from Monte Carlo simulation. Well-known metastable effects are observed in regions of the model's parameter space where agent rationality is above a critical value, and we calculate the time scale at which equilibrium is reached using a highly accurate method based on first passage time theory. In addition to considering selfish agents, who only care to maximise their own utility, we consider altruistic agents who make decisions on the basis

SUBMITTER: Holehouse J 

PROVIDER: S-EPMC9135261 | biostudies-literature | 2022

REPOSITORIES: biostudies-literature