Genicot, Garance. <br/><br/>
Tolerance and Compromise in Social Networks / 
Garance Genicot. 
 - Cambridge, Mass.  National Bureau of Economic Research  2019. 
 - 1 online resource:  illustrations (black and white); 
 - NBER working paper series  no. w25506 .
 - Working Paper Series (National Bureau of Economic Research)  no. w25506. .
<br/><br/> January 2019. 
<br/><br/> In this paper, individuals are characterized by their identity -- an ideal code of conduct  -- and by a level of tolerance for behaviors that differ from their own ideal. Individuals first choose their behavior, then form social networks. This paper studies the possibility of compromise, i.e. individuals choosing a behavior different from their ideal point, in order to be accepted by others, to "belong.'' I first show that when tolerance levels are the same in society, compromise is impossible: individuals all choose their preferred behavior and form friendships only with others whose ideal point belong to their tolerance window. In contrast, I show that heterogeneity in tolerance allows for compromise in equilibrium. Moreover, if identity and tolerance are independently distributed, any equilibrium involves some compromise. 
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