Friday, February 27, 2015

Game theory and cool-kidology

It would appear that there’s a substantial academic literature on social groupings amongst adolescents at schools. I learned about this while attending a seminar by Robert Akerlof on Social norm formation: the role of esteem. The paper considers a simplified model of social interaction between adoloscents1 in which (in a 2-player version) each player makes 3 choices: effort at 2 activities (academic achievement versus rock music), which one to value, and whether to interact with the other player. There are exogenous costs of effort and of interaction; the latter may be positive or negative. If both players choose to interact with effort at the same activity, then the weaker player grants esteem to the other player; self-esteem may also be derived from valuing the activity you really prefer. Esteem is what everyone wants. The model is somewhat reminiscent of social network models of opinion adoption, but without an underlying graph and neighbourhood structure.

The paper aims to be “the first model to capture the conflict between conformity and differentiation, which is at the heart of social interaction in many economic settings”. One key feature of the real world that the model aims to capture is the way we give up on activities where there are poor prospects of being competitive; competition for academic achievement is high amongst pupils of similar ability, but a big disparity may cause the weaker ones to switch to something else entirely. Apparently this can be used to explain why Catholic schools have lower drop-out rates; the lower cost of interaction helps (according to the equilibrium of the simultaneous-move game) pupils who are weak academically, and would be most likely to drop out. The model also predicts a “smart set”, and a “cool set” who have high self-esteem, and the middle, who have low self-esteem. That was probably you, if you read this far.

1No jokes now. I’m willing to accept that it’s possible to simplify interaction amongst adolescents.

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