Group Identity, Social Learning and Opinion Dynamics

Abstract: In this paper, we study opinion dynamics in a balanced social structure consisting of two groups. Agents learn the true state of the world naively learning from their neighbors and from an unbiased source of information. Agents want to agree with others of the same group--in-group identity -- but to disagree with those of the opposite group--out-group conflict. We characterize the long-run opinions, and show that agents' influence depends on their Bonacich centrality in the signed network of opinion exchange. Finally, we study the effect of group size, the weight given to unbiased information and homophily when agents in the same group are homogeneous.