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Network architecture, salience and coordination

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

Abstract

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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  • Choi, Syngjoo & Gale, Douglas & Kariv, Shachar & Palfrey, Thomas, "undated". "Network architecture, salience and coordination," Working Papers 1291, California Institute of Technology, Division of the Humanities and Social Sciences.
  • Handle: RePEc:clt:sswopa:1291
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    References listed on IDEAS

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    4. Alfonso Rosa García & Hubert Janos Kiss & Ismael Rodríguez Lara, 2009. "Do social networks prevent bank runs?," Working Papers. Serie AD 2009-25, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    5. Marco Battaglini & Salvatore Nunnari & Thomas R. Palfrey, 2016. "The Dynamic Free Rider Problem: A Laboratory Study," American Economic Journal: Microeconomics, American Economic Association, vol. 8(4), pages 268-308, November.
    6. Rosa-García, Alfonso & Kiss, Hubert Janos, 2011. "Coordination structures," MPRA Paper 30463, University Library of Munich, Germany.
    7. Gary Charness & Francesco Feri & Miguel A. Meléndez‐Jiménez & Matthias Sutter, 2014. "Experimental Games on Networks: Underpinnings of Behavior and Equilibrium Selection," Econometrica, Econometric Society, vol. 82(5), pages 1615-1670, September.
    8. Murray, Cameron K. & Frijters, Paul & Vorster, Melissa, 2015. "Give and You Shall Receive: The Emergence of Welfare-Reducing Reciprocity," IZA Discussion Papers 9010, Institute of Labor Economics (IZA).
    9. Battaglini, Marco & Nunnari, Salvatore & Palfrey, Thomas R., 2012. "Legislative Bargaining and the Dynamics of Public Investment," American Political Science Review, Cambridge University Press, vol. 106(2), pages 407-429, May.
    10. Murray, Cameron K., 2012. "Markets in political influence: rent-seeking, networks and groups," MPRA Paper 42070, University Library of Munich, Germany.
    11. Hubert Janos Kiss & Ismael Rodriguez-Lara & Alfonso Rosa-Garcia, 2018. "Who runs first to the bank?," CERS-IE WORKING PAPERS 1826, Institute of Economics, Centre for Economic and Regional Studies.
    12. Edoardo Gallo & Chang Yan, 2015. "Effciency and equilibrium in network games: An experiment," Cambridge Working Papers in Economics 1546, Faculty of Economics, University of Cambridge.
    13. Syngjoo Choi & Edoardo Gallo & Shachar Kariv, 2015. "Networks in the laboratory," Cambridge Working Papers in Economics 1551, Faculty of Economics, University of Cambridge.
    14. Ying Chen & Tom Lane & Stuart McDonald, 2023. "Endogenous Network Formation in Local Public Goods: An Experimental Analysis," Discussion Papers 2023-02, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    15. Kiss, Hubert Janos & Rodriguez-Lara, Ismael & Rosa-García, Alfonso, 2014. "Do social networks prevent or promote bank runs?," Journal of Economic Behavior & Organization, Elsevier, vol. 101(C), pages 87-99.
    16. Kiss, Hubert János & Rodriguez-Lara, Ismael & Rosa-Garcia, Alfonso, 2022. "Who withdraws first? Line formation during bank runs," Journal of Banking & Finance, Elsevier, vol. 140(C).
    17. Benjamin Ouvrard & Anne Stenger, 2017. "Nudging with heterogeneity in terms of environmental sensitivity : a public goods experiment in networks," Working Papers of BETA 2017-36, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    18. Nisvan Erkal & Boon Han Koh & Nguyen Lam, 2023. "Using Milestones as a Source of Feedback in Teamwork: Insights from a Dynamic Voluntary Contribution Mechanism," Discussion Papers 2310, University of Exeter, Department of Economics.

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