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Network architecture, salience and coordination

  • Choi, Syngjoo
  • Gale, Douglas
  • Kariv, Shachar
  • Palfrey, Thomas

This paper reports the results of an experimental investigation of dynamic games in networks. In each period, the subjects simultaneously choose whether or not to make an irreversible contribution to the provision of an indivisible public good. Subjects observe the past actions of other subjects if and only if they are connected by the network. Networks may be incomplete so subjects are asymmetrically informed about the actions of other subjects in the same network, which is typically an obstacle to the attainment of an efficient outcome. For all networks, the game has a large set of (possibly inefficient) equilibrium outcomes. Nonetheless, the network architecture makes certain strategies salient and this in turn facilitates coordination on efficient outcomes. In particular, asymmetries in the network architecture encourage two salient behaviors, strategic delay and strategic commitment. By contrast, we find that symmetries in the network architecture can lead to mis-coordination and inefficient outcomes.

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Paper provided by California Institute of Technology, Division of the Humanities and Social Sciences in its series Working Papers with number 1291.

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Length: 45 pages
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Handle: RePEc:clt:sswopa:1291
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  1. Marx, Leslie M & Matthews, Steven A, 2000. "Dynamic Voluntary Contribution to a Public Project," Review of Economic Studies, Wiley Blackwell, vol. 67(2), pages 327-58, April.
  2. James Andreoni, 1998. "Toward a Theory of Charitable Fund-Raising," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1186-1213, December.
  3. Admati, Anat R & Perry, Motty, 1991. "Joint Projects without Commitment," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 259-76, April.
  4. Syngjoo Choi & Douglas Gale & Shachar Kariv, 2006. "Sequential Equilibrium in Monotone Games: Theory-Based Analysis of Experimental Data," Levine's Bibliography 784828000000000278, UCLA Department of Economics.
  5. Lise Vesterlund & John Duffy & Jack Ochs, 2004. "Giving Little by Little: Dynamic Voluntary Contribution Games," Econometric Society 2004 North American Winter Meetings 402, Econometric Society.
  6. van Damme, Eric, 1989. "Stable equilibria and forward induction," Journal of Economic Theory, Elsevier, vol. 48(2), pages 476-496, August.
  7. Giovanna Devetag & Andreas Ortmann, 2006. "When and Why? A Critical Survey on Coordination Failure in the Laboratory," CEEL Working Papers 0605, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
  8. Van Huyck, John B & Battalio, Raymond C & Beil, Richard O, 1990. "Tacit Coordination Games, Strategic Uncertainty, and Coordination Failure," American Economic Review, American Economic Association, vol. 80(1), pages 234-48, March.
  9. Cassar, Alessandra, 2007. "Coordination and cooperation in local, random and small world networks: Experimental evidence," Games and Economic Behavior, Elsevier, vol. 58(2), pages 209-230, February.
  10. Gale, Douglas, 1995. "Dynamic Coordination Games," Economic Theory, Springer, vol. 5(1), pages 1-18, January.
  11. Richard Mckelvey & Thomas Palfrey, 1998. "Quantal Response Equilibria for Extensive Form Games," Experimental Economics, Springer, vol. 1(1), pages 9-41, June.
  12. Gale, Douglas, 2001. "Monotone Games with Positive Spillovers," Games and Economic Behavior, Elsevier, vol. 37(2), pages 295-320, November.
  13. Carlos Alós-Ferrer & Christoph Kuzmics, 2008. "Hidden Symmetries and Focal Points," TWI Research Paper Series 35, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
  14. John Duffy & Jack Ochs, 2004. "Cooperative Behavior and the Frequency of Social Interaction," Levine's Working Paper Archive 122247000000000060, David K. Levine.
  15. Bagnoli, Mark & Lipman, Barton L, 1992. " Private Provision of Public Goods Can Be Efficient," Public Choice, Springer, vol. 74(1), pages 59-78, July.
  16. Van Huyck, John B & Battalio, Raymond C & Beil, Richard O, 1991. "Strategic Uncertainty, Equilibrium Selection, and Coordination Failure in Average Opinion Games," The Quarterly Journal of Economics, MIT Press, vol. 106(3), pages 885-910, August.
  17. Kosfeld Michael, 2004. "Economic Networks in the Laboratory: A Survey," Review of Network Economics, De Gruyter, vol. 3(1), pages 1-23, March.
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