The Spread of Free-Riding Behavior in a Social Network
AbstractWe study a model where agents, located in a social network, decide whether to exert effort or not in experimenting with a new technology (or acquiring a new skill, innovating, etc.). We assume that agents have strong incentives to free ride on their neighbors' effort decisions. In the static version of the model efforts are chosen simultaneously. In equilibrium, agents exerting effort are never connected with each other and all other agents are connected with at least one agent exerting effort. We propose a mean-field dynamics in which agents choose in each period the best response to the last period's decisions of their neighbors. We characterize the equilibrium of such a dynamics and show how the pattern of free riders in the network depends on properties of the connectivity distribution.
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Bibliographic InfoPaper provided by Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) in its series UFAE and IAE Working Papers with number 718.07.
Date of creation: 04 Nov 2007
Date of revision:
free ride; independent set; local public good; mean field; social network.;
Other versions of this item:
- Dunia L�pez-Pintado, 2008. "The Spread of Free-Riding Behavior in a Social Network," Eastern Economic Journal, Palgrave Macmillan, vol. 34(4), pages 464-479.
- C45 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Neural Networks and Related Topics
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- D00 - Microeconomics - - General - - - General
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-11-24 (All new papers)
- NEP-NET-2007-11-24 (Network Economics)
- NEP-SOC-2007-11-24 (Social Norms & Social Capital)
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- Dunia López-Pintado, 2004.
"Diffusion In Complex Social Networks,"
Working Papers. Serie AD
2004-33, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Paolo Pin & Luca Dall'Asta & Abolfazl Ramezanpour, 2009.
"Optimal Equilibria of the Best Shot Game,"
2009.33, Fondazione Eni Enrico Mattei.
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