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Strategies in Social Network Formation

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  • Anna Conte
  • Daniela Di Cagno
  • Emanuela Sciubba

    (Department of Economics, Mathematics & Statistics, Birkbeck)

Abstract

We run a computerised experiment of network formation where all connections are beneficial and only direct links are costly. Players simultaneously submit link proposals; a connection is made only when both players involved agree. We use both simulated and experimentally generated data to test the determinants of individual behaviour in network formation. We find that approximately 40% of the network formation strategies adopted by the experimental subjects can be accounted for as best responses. We test whether subjects follow alternative patterns of behaviour and in particular if they: propose links to those from whom they have received link proposals in the previous round; propose links to those who have the largest number of direct connections. We find that together with best response behaviour, these strategies explain approximately 75% of the observed choices. We estimate individual propensities to adopt each of these strategies, controlling for group effects. Finally we estimate a mixture model to highlight the proportion of each type of decision maker in the population.

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File URL: http://www.ems.bbk.ac.uk/research/wp/PDF/BWPEF0905.pdf
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Bibliographic Info

Paper provided by Birkbeck, Department of Economics, Mathematics & Statistics in its series Birkbeck Working Papers in Economics and Finance with number 0905.

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Date of creation: Jun 2009
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Handle: RePEc:bbk:bbkefp:0905

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Cited by:
  1. Mario Maggioni & Teodora Uberti, 2011. "Networks and geography in the economics of knowledge flows," Quality & Quantity: International Journal of Methodology, Springer, vol. 45(5), pages 1031-1051, August.
  2. Alexia Gaudeul & Caterina Giannetti, 2011. "The role of reciprocation in social network formation, with an application to blogging," Jena Economic Research Papers 2011-015, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  3. Caria, Antonia Stefano & Hassen, Ibrahim Worku, 2013. "The formation of job referral networks: Experimental evidence from ubran Ethiopia:," IFPRI discussion papers 1282, International Food Policy Research Institute (IFPRI).

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