Threshold behavior and aggregate fluctuations

• Published in: Journal of economic theory Vol. 127; no. 1; p. 309
• Main Author: Nirei, Makoto
• Format: Journal Article
• Language: English
• Published: New York Elsevier Science Publishing Company, Inc 01.03.2006
• Subjects: Economic theory; Propagation; Studies

This paper concerns a propagation mechanism in an economy where many individuals follow a threshold rule and interact with a positive feedback. We derive an asymptotic distribution of the propagation size when the number of the agents tends to infinity. The propagation distribution exhibits a slower...