DP11174 Cultural Leaders and the Dynamics of Assimilation

Author(s): Thierry Verdier, Yves Zenou
Publication Date: March 2016
Keyword(s): cultural substituability, dynamic differential game, forward-looking leaders, integration
JEL(s): J13, J15, Z10
Programme Areas: Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=11174

This paper studies the population dynamics of cultural traits in a model of intergenerational cultural transmission with perfectly-forward looking cultural leaders who compete for oblique socialization. When there is only one leader, we show that there exists a threshold size in terms of population above which the cultural leader becomes active. We then consider the competition between two forward-looking leaders and characterize the open-loop Nash equilibrium of this differential dynamic game. In terms of policy implications, we show that the policymaker should take into account the crucial interaction between the centralized transmission of cultural traits by leaders and the decentralized transmission of these traits by parents and peers and should differentiate between the short-term and long-term effects of a policy due to over-reactions or under-reactions of the different cultural groups.