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Myopic or Farsighted? An Experiment on Network Formation

  • 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
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Handle: RePEc:cpr:ceprdp:8263
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  1. Watts, Alison, 2001. "A Dynamic Model of Network Formation," Games and Economic Behavior, Elsevier, vol. 34(2), pages 331-341, February.
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  8. HERINGS, Jean-Jacques & MAULEON, Ana & ANNETELBOSCH, Vincent J., . "Rationalizability for social environments," CORE Discussion Papers RP 1718, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  9. MAULEON, Ana & VANNETELBOSCH, Vincent, . "Farsightedness and cautiousness in coalition formation games with positive spillovers," CORE Discussion Papers RP 1729, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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  23. Matthew O. Jackson & Asher Wolinsky, 1994. "A Strategic Model of Social and Economic Networks," Discussion Papers 1098, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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