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Myopic or Farsighted? An Experiment on Network Formation

Listed author(s):
  • Kirchsteiger, Georg
  • Mantovani, Marco
  • Mauleon, Ana
  • Vannetelbosch, Vincent

Pairwise stability (Jackson and Wolinsky, 1996) is the standard stability concept in network formation. It assumes myopic behavior of the agents in the sense that they do not forecast how others might react to their actions. Assuming that agents are farsighted, related stability concepts have been proposed. We design a simple network formation experiment to test these theories. Our results provide support for farsighted stability and strongly reject the idea of myopic behavior.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8263.

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Date of creation: Feb 2011
Handle: RePEc:cpr:ceprdp:8263
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  1. Samir Kamat & Frank Page & Myrna Wooders, 2004. "Networks and Farsighted Stability," Econometric Society 2004 North American Winter Meetings 561, Econometric Society.
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  8. HERINGS, Jean-Jacques & MAULEON, Ana & VANNETELBOSCH, Vincent, "undated". "Farsightedly stable networks," CORE Discussion Papers RP 2171, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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  13. Gilles Grandjean & Ana Mauleon & Vincent Vannetelbosch, 2011. "Connections Among Farsighted Agents," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 13(6), pages 935-955, December.
  14. TERCIEUX, Olivier & VANNETELBOSCH, Vincent, "undated". "A characterization of stochastically stable networks," CORE Discussion Papers RP 1877, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  15. Ana Mauleon & Vincent Vannetelbosch, 2004. "Farsightedness and Cautiousness in Coalition Formation Games with Positive Spillovers," Theory and Decision, Springer, vol. 56(3), pages 291-324, 05.
  16. Engelmann Dirk & Strobel Martin, 2002. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments," Research Memorandum 015, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
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  19. Calvó-Armengol, Antoni & Zenou, Yves, 2003. "Social Networks and Crime Decisions: The Role of Social Structure in Facilitating Delinquent Behavior," Working Paper Series 601, Research Institute of Industrial Economics.
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  23. Anthony Ziegelmeyer & Katinka Pantz, 2005. "Collaborative Networks in Experimental Triopolies," Papers on Strategic Interaction 2005-38, Max Planck Institute of Economics, Strategic Interaction Group.
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