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Network architecture, salience and coordination

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  • Choi, Syngjoo
  • Gale, Douglas
  • Kariv, Shachar
  • Palfrey, Thomas

Abstract

This paper reports the results of an experimental investigation of dynamic games in networks. In each period, the subjects simultaneously choose whether or not to make an irreversible contribution to the provision of an indivisible public good. Subjects observe the past actions of other subjects if and only if they are connected by the network. Networks may be incomplete so subjects are asymmetrically informed about the actions of other subjects in the same network, which is typically an obstacle to the attainment of an efficient outcome. For all networks, the game has a large set of (possibly inefficient) equilibrium outcomes. Nonetheless, the network architecture makes certain strategies salient and this in turn facilitates coordination on efficient outcomes. In particular, asymmetries in the network architecture encourage two salient behaviors, strategic delay and strategic commitment. By contrast, we find that symmetries in the network architecture can lead to mis-coordination and inefficient outcomes.

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Bibliographic Info

Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 73 (2011)
Issue (Month): 1 (September)
Pages: 76-90

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Handle: RePEc:eee:gamebe:v:73:y:2011:i:1:p:76-90

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Web page: http://www.elsevier.com/locate/inca/622836

Related research

Keywords: Experiment Monotone games Networks Coordination Strategic commitment Strategic delay;

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References

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  1. Gale, Douglas, 1995. "Dynamic Coordination Games," Economic Theory, Springer, vol. 5(1), pages 1-18, January.
  2. James Andreoni, 1998. "Toward a Theory of Charitable Fund-Raising," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1186-1213, December.
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  5. Kosfeld Michael, 2004. "Economic Networks in the Laboratory: A Survey," Review of Network Economics, De Gruyter, vol. 3(1), pages 1-23, March.
  6. Lise Vesterlund & John Duffy & Jack Ochs, 2004. "Giving Little by Little: Dynamic Voluntary Contribution Games," Econometric Society 2004 North American Winter Meetings 402, Econometric Society.
  7. John Duffy & Jack Ochs, 2006. "Cooperative Behavior and the Frequency of Social Interaction," Working Papers 274, University of Pittsburgh, Department of Economics, revised Jul 2008.
  8. John B Van Huyck & Raymond C Battalio & Richard O Beil, 1997. "Tacit coordination games, strategic uncertainty, and coordination failure," Levine's Working Paper Archive 1225, David K. Levine.
  9. Alós-Ferrer, Carlos & Kuzmics, Christoph, 2013. "Hidden symmetries and focal points," Journal of Economic Theory, Elsevier, vol. 148(1), pages 226-258.
  10. Choi, Syngjoo & Gale, Douglas & Kariv, Shachar, 2008. "Sequential equilibrium in monotone games: A theory-based analysis of experimental data," Journal of Economic Theory, Elsevier, vol. 143(1), pages 302-330, November.
  11. Bagnoli, Mark & Lipman, Barton L, 1992. " Private Provision of Public Goods Can Be Efficient," Public Choice, Springer, vol. 74(1), pages 59-78, July.
  12. Van Huyck, John B & Battalio, Raymond C & Beil, Richard O, 1991. "Strategic Uncertainty, Equilibrium Selection, and Coordination Failure in Average Opinion Games," The Quarterly Journal of Economics, MIT Press, vol. 106(3), pages 885-910, August.
  13. van Damme,Eric, 1987. "Stable equilibria and forward induction," Discussion Paper Serie A 128, University of Bonn, Germany.
  14. Gale, Douglas, 2001. "Monotone Games with Positive Spillovers," Games and Economic Behavior, Elsevier, vol. 37(2), pages 295-320, November.
  15. Admati, Anat R & Perry, Motty, 1991. "Joint Projects without Commitment," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 259-76, April.
  16. Cassar, Alessandra, 2007. "Coordination and cooperation in local, random and small world networks: Experimental evidence," Games and Economic Behavior, Elsevier, vol. 58(2), pages 209-230, February.
  17. Richard Mckelvey & Thomas Palfrey, 1998. "Quantal Response Equilibria for Extensive Form Games," Experimental Economics, Springer, vol. 1(1), pages 9-41, June.
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Citations

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Cited by:
  1. Jaromir Kovarik & Friederike Mengel & José Gabriel Romero, 2010. "(Anti-) Coordination in Networks," Working Papers 2010.49, Fondazione Eni Enrico Mattei.
  2. Choi, Syngjoo & Lee, Jihong, 2009. "Communication, Coordination and Networks," MPRA Paper 19055, University Library of Munich, Germany.
  3. Kiss, Hubert Janos & Rodriguez-Lara, Ismael & Rosa-García, Alfonso, 2014. "Do Women Panic More Than Men? An Experimental Study on Financial Decision," MPRA Paper 52912, University Library of Munich, Germany.
  4. Battaglini, Marco & Nunnari, Salvatore & Palfrey, Thomas, 2011. "Legislative bargaining and the dynamics of public investment," Discussion Papers, Research Unit: Market Behavior SP II 2011-205, Social Science Research Center Berlin (WZB).
  5. Murray, Cameron K., 2012. "Markets in political influence: rent-seeking, networks and groups," MPRA Paper 42070, University Library of Munich, Germany.
  6. Alfonso Rosa García & Hubert Janos Kiss & Ismael Rodríguez Lara, 2009. "Do social networks prevent bank runs?," Working Papers. Serie AD 2009-25, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  7. Charness, Gary & Feri, Francesco & Meléndez-Jiménez, Miguel A & Sutter, Matthias, 2013. "Experimental Games on Networks: Underpinnings of Behavior andEquilibrium Selection," University of California at Santa Barbara, Economics Working Paper Series qt6m0584qv, Department of Economics, UC Santa Barbara.
  8. Hubert Janos Kiss & Ismael Rodriguez-Lara & Alfonso Rosa-Garcia, 2013. "Do Social Networks Prevent or Promote Bank Runs?," IEHAS Discussion Papers 1344, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  9. Rosa-García, Alfonso & Kiss, Hubert Janos, 2011. "Coordination structures," MPRA Paper 30463, University Library of Munich, Germany.

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