Econometrica: Sep, 1997, Volume 65, Issue 5

Social Distance and Social Decisions

https://doi.org/0012-9682(199709)65:5<1005:SDASD>2.0.CO;2-8
p. 1005-1027

George A. Akerlof

A model of social distance is presented that is useful for understanding social decisions. Status and conformity in previous models are discussed, and then a generalization is described. In this generalization agents have inherited positions in social space and an expected value of trade between two individuals as a function of the difference in their initial positions. An example of this system is constructed in which there is class stability. Agents who are initially close interact strongly while those who are socially distant have little interaction. In this example inherited social position, which may be interpreted as social class, plays a dominant role. The relevance of this model to social decisions such as the choice of educational attainment and childbearing is discussed in the context of specific ethnographic examples. Class position may play a dominant role in these decisions.