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Integration and Segregation


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Working Paper

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Authors

Goyal, S. 
Hernández, P. 
Martínez-Cánovasz, G. 
Moisan, F. 
Muñoz-Herrera, M. 

Abstract

Individuals prefer to coordinate with others, but they differ on the preferred action. In theory, this can give rise to an integrated society with everyone conforming to the same action or a segregated society with members of different groups choosing diverse actions. Social welfare is maximum when society is integrated and everyone conforms on the majority's action. In laboratory experiments, subjects with different preferences segregate into distinct groups and choose diverse actions. To understand the role of partner choice, we then consider an exogenous network of partners. Subjects in the experiment now choose to conform on the action preferred by the majority. Thus, there exists a tension between two deeply held values: social cohesion and freedom of association.

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Faculty of Economics

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