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Connectors and Influencers

Author

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

Abstract

Classical models of network formation bring out the salience of a `law of the few' property, that is manifest in hub-spoke/star architectures. Existing experiments on network formation find that subjects do not create such networks. Our paper conducts a network formation experiment on the model of Galeotti and Goyal (2010). The theory predicts that every equilibrium of this game is a `star' network in which the spokes pay for links with a single hub. There are two equilibrium effort configurations: the center makes all the effort (the pure influencer outcome) and the hub makes zero effort (the pure connector outcome). This paper tests these predictions with the help of a new experimental platform with asynchronous activity in continuous time. We vary group size and provision of information of others' payoffs. Subjects always create networks with specialization in linking. This is consistent with equilibrium prediction. Our second result concerns the interaction of group size and information provision. In a baseline information treatment where subjects only see their own payoffs, they select the pure influencer outcome. By contrast, when we provide information on everyone's payoffs, in large groups, subjects select a pure connector outcome. These behavioural patterns can be accounted for by a decision rule on activity level that combines myopic best response and competition for hub status.

Suggested Citation

  • Choi, S & Goyal, S. & Moisan, F., 2019. "Connectors and Influencers," Cambridge Working Papers in Economics 1935, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camdae:1935
    Note: sg472, fm442
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    References listed on IDEAS

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    Cited by:

    1. Yang Sun & Wei Zhao & Junjie Zhou, 2021. "Structural Interventions in Networks," Papers 2101.12420, arXiv.org, revised Feb 2021.
    2. Choi, S. & Goyal, S. & Moisan, F., 2020. "Brokerage," Cambridge Working Papers in Economics 2005, Faculty of Economics, University of Cambridge.

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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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