Dynamics of social tolerance in the economic interaction model with three groups

Abstract

The dynamics of social tolerance among three groups of economic agents have been discussed. We show that dynamics of social tolerance between two groups can be greatly influenced by the third group, and a society with three groups exhibits rich behaviours which are very different from the two-group case. In the three-group case, a fully intolerant society may also get total welfare maximization, while a society with higher social costs gets lower total welfare. Cultural integration is vitally important in achieving full tolerance and total welfare maximization. In particular, suitably increase the number of groups, which can reduce the necessary condition of achieving full tolerance, is an effective method if cultural integration is invalid.

Keywords:

• tolerance
• economic interaction model
• replicator dynamics
• total welfare maximization

JEL Classification:

• C70
• D71