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Cooperation in Evolving Social Networks

Author

Listed:
  • Nobuyuki Hanaki

    () (Doctoral Program in International Political Economy, Graduate School of Humanity and Social Sciences, University of Tsukuba, 1-1-1 Tennodai, Tsukuba, Ibaraki 305-8573, Japan)

  • Alexander Peterhansl

    () (Department of Economics, Columbia University, 1022 International Affairs Building, 420 West 118th Street, New York, New York 10027)

  • Peter S. Dodds

    () (Department of Mathematics and Statistics, 203 Lord House, University of Vermont, 16 Colchester Avenue, Burlington, Vermont 05401)

  • Duncan J. Watts

    () (Institute for Social and Economic Research and Policy, Columbia University, 8th Floor, International Affairs Building, 420 West 118th Street, New York, New York 10027 and Department of Sociology, Columbia University, 413 Fayerweather Hall, 1180 Amsterdam Avenue, New York, New York 10027)

Abstract

We study the problem of cooperative behavior emerging in an environment where individual behaviors and interaction structures coevolve. Players not only learn which strategy to adopt by imitating the strategy of the best-performing player they observe, but also choose with whom they should interact by selectively creating and/or severing ties with other players based on a myopic cost-benefit comparison. We find that scalable cooperation--that is, high levels of cooperation in large populations--can be achieved in sparse networks, assuming that individuals are able to sever ties unilaterally and that new ties can only be created with the mutual consent of both parties. Detailed examination shows that there is an important trade-off between local reinforcement and global expansion in achieving cooperation in dynamic networks. As a result, networks in which ties are costly and local structure is largely absent tend to generate higher levels of cooperation than those in which ties are made easily and friends of friends interact with high probability, where the latter result contrasts strongly with the usual intuition.

Suggested Citation

  • Nobuyuki Hanaki & Alexander Peterhansl & Peter S. Dodds & Duncan J. Watts, 2007. "Cooperation in Evolving Social Networks," Management Science, INFORMS, vol. 53(7), pages 1036-1050, July.
  • Handle: RePEc:inm:ormnsc:v:53:y:2007:i:7:p:1036-1050
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    File URL: http://dx.doi.org/10.1287/mnsc.1060.0625
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    References listed on IDEAS

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    1. Bergstrom, Theodore C & Stark, Oded, 1993. "How Altruism Can Prevail in an Evolutionary Environment," American Economic Review, American Economic Association, vol. 83(2), pages 149-155, May.
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    3. Jackson, Matthew O. & Watts, Alison, 2002. "On the formation of interaction networks in social coordination games," Games and Economic Behavior, Elsevier, vol. 41(2), pages 265-291, November.
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    Citations

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    Cited by:

    1. Tackseung Jun & Jeong-Yoo Kim, 2009. "Local Interaction, Altruism and the Evolution of Networks," Korean Economic Review, Korean Economic Association, vol. 25, pages 269-287.
    2. David Hagmann & Troy Tassier, 2014. "Endogenous Movement and Equilibrium Selection in Spatial Coordination Games," Computational Economics, Springer;Society for Computational Economics, vol. 44(3), pages 379-395, October.
    3. Zhong, Weicai & Abbass, Hussein A. & Bender, Axel & Liu, Jing, 2011. "Mixed strategy and coevolution dynamics in social networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 390(2), pages 410-417.
    4. Fosco, Constanza & Mengel, Friederike, 2011. "Cooperation through imitation and exclusion in networks," Journal of Economic Dynamics and Control, Elsevier, vol. 35(5), pages 641-658, May.
    5. repec:spr:infosf:v:17:y:2015:i:5:d:10.1007_s10796-014-9483-8 is not listed on IDEAS
    6. Constanza Fosco & Matteo Marsili & Fernando Vega-Redondo, 2008. "Peer Effects and Peer Avoidance: Epidemic Diffusion in Coevolving Networks," Economics Working Papers ECO2008/19, European University Institute.
    7. Jason Barr & Troy Tassier, 2010. "Endogenous Neighborhood Selection and the Attainment of Cooperation in a Spatial Prisoner’s Dilemma Game," Computational Economics, Springer;Society for Computational Economics, vol. 35(3), pages 211-234, March.
    8. Teruyoshi Kobayashi & Taro Takaguchi, 2017. "Significant ties: Identifying relationship lending in temporal interbank networks," Discussion Papers 1717, Graduate School of Economics, Kobe University.
    9. Sándor Juhász & Balázs Lengyel, 2016. "Tie creation versus tie persistence in cluster knowledge networks," Papers in Evolutionary Economic Geography (PEEG) 1613, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised May 2016.
    10. Edoardo Mollona, 2008. "Computer simulation in social sciences," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 12(2), pages 205-211, May.
    11. Xiao, Yu & Han, Jingti, 2016. "Forecasting new product diffusion with agent-based models," Technological Forecasting and Social Change, Elsevier, vol. 105(C), pages 167-178.
    12. Haydée Lugo & Raúl Jiménez, 2006. "Incentives to Cooperate in Network Formation," Computational Economics, Springer;Society for Computational Economics, vol. 28(1), pages 15-27, August.
    13. Deng, Lili & Tang, Wansheng & Zhang, Jianxiong, 2011. "The coevolutionary ultimatum game on different network topologies," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 390(23), pages 4227-4235.
    14. Faqi Du & Feng Fu, 2011. "Partner Selection Shapes the Strategic and Topological Evolution of Cooperation," Dynamic Games and Applications, Springer, vol. 1(3), pages 354-369, September.
    15. Rezaei, Golriz & Kirley, Michael, 2012. "Dynamic social networks facilitate cooperation in the N-player Prisoner’s Dilemma," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 391(23), pages 6199-6211.
    16. Luthi, Leslie & Pestelacci, Enea & Tomassini, Marco, 2008. "Cooperation and community structure in social networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 387(4), pages 955-966.
    17. Haghnevis, Moeed & Askin, Ronald G. & Armbruster, Dieter, 2016. "An agent-based modeling optimization approach for understanding behavior of engineered complex adaptive systems," Socio-Economic Planning Sciences, Elsevier, vol. 56(C), pages 67-87.
    18. Gao, Lan & Liu, Xiaohui & Zou, Huan, 2013. "The role of human mobility in promoting Chinese outward FDI: A neglected factor?," International Business Review, Elsevier, vol. 22(2), pages 437-449.
    19. Matthias Greiff, 2013. "Rewards and the private provision of public goods on dynamic networks," Journal of Evolutionary Economics, Springer, vol. 23(5), pages 1001-1021, November.
    20. Daniel Ladley & Ian Wilkinson & Louise Young, 2013. "The Evolution Of Cooperation In Business: Individual Vs. Group Incentives," Discussion Papers in Economics 13/14, Department of Economics, University of Leicester.
    21. Sergio Currarini & Carmen Marchiori & Alessandro Tavoni, 2016. "Network Economics and the Environment: Insights and Perspectives," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(1), pages 159-189, September.
    22. Friederike Mengel, 2009. "Conformism and cooperation in a local interaction model," Journal of Evolutionary Economics, Springer, vol. 19(3), pages 397-415, June.
    23. Eleonore Huang Vogel, 2012. "Entrepreneurial Opportunity Recognition and Exploitation in the Academia: a Dynamic Process of Networking," ERSA conference papers ersa12p1091, European Regional Science Association.
    24. Julian Dormann & Thomas Ehrmann & Michael Kopel, 2008. "Managing the Evolution of Cooperation," Papers on Economics and Evolution 2008-01, Philipps University Marburg, Department of Geography.

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