Coordination in Networks Formation: Experimental Evidence on Learning and Salience
AbstractWe present experiments on repeated non-cooperative network formation games, based on Bala and Goyal (2000). We treat the one-way and the two-ways flow models, each for high and low link costs. The models show both multiple equilibria and coordination problems. We conduct experiments under various conditions which control for salient labeling and learning dynamics. Contrary to previous experiments, we find that coordination on non-empty Strict Nash equilibria is not an easy task for subjects to achieve, even in the mono-directional model where the Strict Nash equilibria is a wheel. We find that salience significantly helps coordination, but only when subjects are pre-instructed to think of the wheel network as a reasonable way to play the networking game. Evidence on learning behavior provides support for subjects choosing strategies consistent with various learning rules, which include as the main ones Reinforcement and Fictitious Play.
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Bibliographic InfoPaper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2005.107.
Date of creation: Sep 2005
Date of revision:
Experiments; Networks; Behavioral game theory; Salience; Learning dynamics;
Find related papers by JEL classification:
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-12-09 (All new papers)
- NEP-CBE-2005-12-09 (Cognitive & Behavioural Economics)
- NEP-EXP-2005-12-09 (Experimental Economics)
- NEP-GTH-2005-12-09 (Game Theory)
- NEP-NET-2005-12-09 (Network Economics)
- NEP-SOC-2005-12-09 (Social Norms & Social Capital)
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- Michele Bernasconi & Matteo Galizzi, 2010. "Network formation in repeated interactions: experimental evidence on dynamic behaviour," Mind and Society: Cognitive Studies in Economics and Social Sciences, Fondazione Rosselli, vol. 9(2), pages 193-228, December.
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- Daniela Di Cagno & Emanuela Sciubba, 2008. "Social Networks and Trust: not the Experimental Evidence you may Expect," Birkbeck Working Papers in Economics and Finance 0801, Birkbeck, Department of Economics, Mathematics & Statistics.
- Di Cagno, Daniela & Sciubba, Emanuela, 2010. "Trust, trustworthiness and social networks: Playing a trust game when networks are formed in the lab," Journal of Economic Behavior & Organization, Elsevier, vol. 75(2), pages 156-167, August.
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