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What is Sorting?
People choose people that have similar behavior. What is important is the choice in sorting there is an active choice that is the essential difference with peer-effects.
Note on the type of model used here: Not used: equation based model
(Example: exam score = 50 + 5 * hours) would be a linear model of someones grade Where 50 is some baseline and 5 times hours is the slope, this model says: if you spend more time preparing your grade will be higher.)
Used: Agent based model: Factors of importance are: 1. 2. 3. individuals behaviors (rules) outcome
The model seems simple but the answers it supplies are surprising.
Extra information
An agent-based model (ABM) is a class of computational models for simulating the actions and interactions of autonomous agents, with a view to assessing their effects on the system as a whole. Most agent-based models are composed of 1 numerous agents specified at various scales. 2. decision making heuristics. 3. learning rules or adaptive processes. 4. an interacton topology. 5. a non-agent environment.
Source: Wikipedia.
Figure 1.
Racial Segregation in New York: Red = Caucasian, Blue: African-American, Yellow: Latino, Green: Asian A simple example of Schelling's model: People (agents) living on a checkerboard environment, who have a threshold (a rule) that causes them to stay or move (outcome). Rich/Poor segregation example: Each cell can have: 1.No person (Blank) 2 Rich person (X) 3 Poor person (O) Xs = Subject of study, T = time. The Rule Xs follows is: if 44 % alike then stay else go (i.e. threshold = 44%). Figure 2. X O O
O Xs X
X O
O O O
O Xs X
X O
Situation at T = 1, One person moved out and another moved in (opposite), is just under threshold so move.
Sample problem:
Suppose Sonja's current threshold is 35%, i.e. she needs at least 35% of her neighbors to be of the same type in order for her to remain at her location. If Sonja currently has four of eight neighbors of the same type, how many neighbors of the same type would have to relocate in order for Sonja to want to move? Assume that no new neighbors replace the old. A. 1 B. 2 C. 3 D. 4 Answer: This problem calls for a simple calculation. If one "like" neighbor relocated, she would still have 3 of 7 of the same type, which is 43%. But if two "like" neighbors relocated, Sonja would then have 2 of 6, which is only 33%. (B).
In the simulation: when the micro-level tolerance would be low, then there would be a perpetual motion of people moving.
Tipping phenomenon of Shelling's model Some Examples of Tipping points Exodus Tip (People moving out cause others to move out) Figure 3. T = 0, rule for X is if 33% same then stay else move. O X 40% O O X 33% X 50% O At T = 0, its alright everybody is in balance, percentages given are percentages of same neighbors. For some reason the middle X is about to move. T=1 O X 25% O O X 33% O At T = 1, Middle X has moved causing Red X, and finally the green X (at T=3) to move out (tipping point) Figure 4. Genesis Tip (People moving in cause others to move out) T = 0, rule is if 33% same then stay else move. X 33% O O X 40% O X 33% T=1 O X 25% O O X 40% O X 33% Now O moving in causes a collapse first Red X moves out then the rest.
Figure 5. b = # blue living in block B = # blue total (150), 120 in big blue block + 30 in green block (1/2 * 10 * 6) y = # yellow living in block Y = # yellow total (90), 60 in yellow block and 30 in green block (1/2 * 10 * 6) Then b/B = the proportion of blue people in that block and y/Y = the proportion of yellow people in that block |(b/B) (y/Y)| = absolute difference of proportions, why this measure? Illustration: If there are 5 Blue and 3 Yellow living in a certain block, and the total of Blue is 150, total of Yellow = 90. Then the proportions would be 5/150 and 3/90 if you take the difference (absolute difference). Then youd get | (5/150) - (3/90) | = 0, this makes sense because it would mean the block is evenly populated regarding the proportions, this would be a perfectly mixed block. Take a look at Figure 5 above, the calculations below are the differences of the proportions Blue and Yellow in each block. |(10/150) (0/90)| = 1/15 in the Blue block |(0/150) (10/90)|= 1/9 in the yellow block |(5/150) (5/90)| = 1/45 in the green block Summing these numbers gives 72/45, what does that number mean? And how do we figure out how segregated the whole unit is? Whenever you construct a measure you can try to use extreme cases as a means to get information about the structure of the model and the meaning of the values. Illustration: extreme case of mixing (perfectly mixed). Figure 6 . All eight squares are green, perfect mixing. What does our calculation yield? Each block has 5 blue and 5 yellow, total people = 10 * 8 = 80, yellow 5 * 8 = 40 and also blue 5 * 8 = 40. For each block the proportion is 5/40 = 1/8 for yellow and blue. The difference of proportions for each block is |1/8-1/8|= 0.
Figure 7. Again total population is 80. Proportion in blue blocks is 10/40 in yellow blocks the proportion is the same 10/40. The difference of proportions is: |1/4 0| in each blue block so 1/ 4 in each block, for a total of 4 * = 1. In each yellow block the difference is |1/4 0| = 1/4 (again each block) , totaling 4 * = 1 if there is perfect segregation then you get a number of 2, if there is no segregation at all you get a number of 0. To get a number between 0 and 1 we can divide by 2. This number forms the index of dissimilarity.
That last part about dividing by 2 is important. Think of it this way: dividing by 2 is a tool to change the scale of Index of Dissimilarity so that our upper limit will be 1 rather than 2. This makes the Index more convenient, logical, and useful. Dividing by 2 should always be the last step in the calculation of Index of Dissimilarity, meaning there is never any reason to divide by any other number. Cool? Got it? Here's the thing: dividing by two doesn't have anything to do with how many groups we have or how many blocks we're looking at. Think of it as a formula - something we do at the end of any Index of Dissimilarity problem. If this still doesn't make sense, don't worry - there's a problem coming up where you can try it.
So what causes a collective action to occur? We can use the Granovetter model to answer this question.
The tail has wagged the dog. An extreme point has caused a cascade. 0, 1, 2, 2, 2 average = 1.4 1, 1, 1, 2, 2 average = 1.4 0 ,1, 2, 3, 4 average = 2 In the last example the average adversity to wear a purple hat is high that means that but through a cascading effect the "action" is spread anyway. This is the tail wagging the dog, a ripple can become a giant wave.
Question: Suppose that there are 10 people who have the following thresholds for joining a volunteer project: 2 will volunteer even if no one else does. 6 require 5 others to volunteer. And 2 will volunteer so long as anyone else does. How many people will volunteer total? A. 4 B. 2 C. 10 D. 6 Answer: (A) There will be 4 volunteers. First, the 2 who will volunteer regardless of others volunteer. Since these 2 volunteer, the 2 that will volunteer as long as at least 1 other person has volunteered will also volunteer. This takes us to 4 volunteers. However, the other 6 will not volunteer, because they will only volunteer if 5 others have volunteered, and only 4 others have volunteered. So we end up with 4 volunteers.
What can we learn from this? 1. If there are more people at the low end (of threshold) an action or belief can cascade through the population, so if you want to predict you need to know the distribution of thresholds (for example discontent). If there is more diversity then there is a greater chance of "cascading" or spreading.
2.
The standing ovation model is an extension of the Granovetter model, it is an example of rule-based behavior. The standing ovation model has two important aspects 1. peer-effects and 2. information. (example of information is: the copying of the behavior of "better" informed individuals). The Framework: Threshold to stand: T (rule: IF people standing > threshold THEN stand) Quality: Q (a show has a quality between 0 and 100) Signal: S = Q + E (signal = quality + error) Initial Rule: IF S > T THEN stand Subsequent Rule: stand if more than X% stand The rule depends on two factors: 1. 2. Initial threshold for quality Threshold for how many people are currently standing (the subsequent rule).
A few claims can be made about the presumable outcomes (based on the rules). Claim 1: IF Higher Q (Quality) THEN more people will stand. Reasoning: Stand if Q + Error > T If Q is higher, more people will be likely to stand. Claim 2: IF lower T THEN more people stand. Reasoning: Stand if Q + Error > T If T is lower, more people will be likely to stand. Claim 3: IF lower X THEN more ovations. Reasoning: Stand If more than X % stand. If X increases the probability that more people stand increases. What would cause X (the threshold) to be Big or Small? X tells something about the individuals in the audience. Some have lower thresholds to stand than others. Explanation of the term Error used in the model: Recall: S = Q + E, Signal = Quality + Error (Diversity) E = Error or Diversity Diversity = interpretation of quality depending on different view. and Error is just noise in perception maybe someone has a "bad" day.
Examples:
Suppose there are 1000 people, T = 60 and Q = 50 50 < 60 as a consequence nobody stands up. The figure below shows how a bigger error can change the outcome. Signal = Quality + Error (Diversity) Here: S = 50 + error, and T = 60.
If the error is between -15 and +15 then S is between 35 and 65 people below 60 all sit. if the error is between -50 and +50 then 40% of people stand up, so if the error is bigger the chance of standing increases.
E in [-15, +15]
Mean
S= 35 50 60 65 0
E in [-50, + 50]
Mean
50 60 100
Stand
Sit
Claim 4: IF Q < T AND (IF more variation E) THEN more people stand. What would cause the Error (E) to be big? - Audience - diverse - unsophisticated - Performance - multidimensional - complex
Higher quality, lower threshold, larger peer effects, more variation, all contribute to higher probability of standing ovations. Without this model it is most likely you would not have found the 4th claim: that more variation leads to more standing ovations . Question: Imagine you are at a concert for which Q is greater than T. If X% is less than 50%, does increasing E increase the chance of a standing ovation? (Hint: Draw a plot, and assume signals are uniformly distributed between 0 and 100.) A. Yes B. No
Answer: B. No. Q>T means that more than half of the audience perceive the quality of the show to be above their threshold (more than 50% will stand up). If X% is less than 50%, there will always be a standing ovation (so long as Q>T), regardless of the variance.
Examples from "Connected" (illustrating peer effects) Happiness distribution: in the chart you see a peer effect of happiness, people hanging out with happy people become happy.
Other examples, where the kind of effect is not ascertained. Average number of hospice days per chronically ill patient
Why can't we always tell which it is sorting or peer effect? In Sorting: AABBAA
BBABBA People would move from places where there are more people like them. In Peer Effect people would start changing behavior so they become more like one another. AABBAA BBABBA The result in either case is: AAAAAA BBBBBB How can we tell whether the result was an effect of sorting or peer effects? To examine if we are dealing with sorting effects we seek for movements (choices people make), if there are peer effects people change behavior, that "micro-level" information is needed to tell if it is a sorting effect or a peer effect (dynamic data, data changing over time) are people moving or are they changing?