Climb on the Bandwagon: Consensus and Periodicity in a Lifetime Utility Model with Strategic Interactions

What is the emergent long-run equilibrium of a society, where many interacting agents beton the optimal energy to put in place in order toclimb on the Bandwagon? In this paper,we study the collective behavior of a large population of agents being either Left or Right:The core idea is that agents benefit from being with the winner party, but, on the otherhand, they suffer a cost in changing their status quo. At the microscopic level, the modelis formulated as a stochastic, symmetric dynamic game withNplayers. In the macroscopiclimit as N goes to infinity, the model can be rephrased as amean field game, whose equilibriadescribe the “rational” collective behavior of the society. It is of particular interest to detectthe emerging long time attractors, e.g., consensus or oscillating behavior. Significantly, wediscover thatbandwagoningcan be persistent at the macrolevel: We provide evidence, alsoon the basis of numerical simulations, of endogenously generated periodicity.