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Experimental Evidence on the Relation Between Network Centrality and Individual Choice

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Listed:
  • Choi, S.
  • Goyal, S.
  • Guo, F.
  • Moisan, F.

Abstract

Social interactions shape individual behaviour and public policy increasingly uses networks to improve effectiveness. It is therefore important to understand if the theoretical predictions on the relation between networks and individual choice are empirically valid. This paper tests a key result in the theory of games on networks: an individual’s action is proportional to their (Bonacich) centrality. Our experiment shows that individual efforts increase in centrality but at a rate of increase that is lower than the theoretical prediction. Moreover, efforts are higher than predicted in some cases and lower than predicted in other cases. These departures from equilibrium have large effects on individual earnings. We propose a model of network based imitation decision rule to explain these deviations.

Suggested Citation

  • Choi, S. & Goyal, S. & Guo, F. & Moisan, F., 2024. "Experimental Evidence on the Relation Between Network Centrality and Individual Choice," Cambridge Working Papers in Economics 2401, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:2401
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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