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Network Cognition


  • Dessí, Roberta
  • Gallo, Edoardo
  • Goyal, Sanjeev


We study individual ability to memorize and recall information about friendship networks using a combination of experiments and survey-based data. In the experiment subjects are shown a network, in which their location is exogenously assigned, and they are then asked questions about the network after it disappears. We find that subjects exhibit two main cognitive biases: (i) they underestimate the mean degree compared to the actual network and (ii) they underestimate (overestimate) the number of frequent (rare) degrees. We then analyze survey data from two `real' friendship networks from a Silicon Valley firm and from a University Research Center. We find, somewhat remarkably, that individuals in these real networks also exhibit these biases. The experiments yield three further findings: (iii) network cognition is affected by the subject's location, (iv) the accuracy of network cognition varies with the nature of the network, and (v) limitations in network cognition have payoff implications.

Suggested Citation

  • Dessí, Roberta & Gallo, Edoardo & Goyal, Sanjeev, 2012. "Network Cognition," CEPR Discussion Papers 8732, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:8732

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    References listed on IDEAS

    1. Dessi, Roberta & Rustichini, Aldo, 2011. "Work for Image and Work for Pay," IDEI Working Papers 683, Institut d'Économie Industrielle (IDEI), Toulouse.
    2. Uri Gneezy & Aldo Rustichini, 2000. "Pay Enough or Don't Pay at All," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 791-810.
    3. Dessi, Roberta & Rustichini, Aldo, 2015. "Strong intrinsic motivation," TSE Working Papers 15-567, Toulouse School of Economics (TSE).
    4. Vega-Redondo,Fernando, 2007. "Complex Social Networks," Cambridge Books, Cambridge University Press, number 9780521857406, May.
    5. Jackson Matthew O. & Rogers Brian W., 2007. "Relating Network Structure to Diffusion Properties through Stochastic Dominance," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 7(1), pages 1-16, February.
    6. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    7. Sanjeev Goyal, 2007. "Introduction to Connections: An Introduction to the Economics of Networks," Introductory Chapters,in: Connections: An Introduction to the Economics of Networks Princeton University Press.
    8. Vega-Redondo,Fernando, 2007. "Complex Social Networks," Cambridge Books, Cambridge University Press, number 9780521674096, May.
    9. 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, pages 1615-1670, September.
    10. Andrea Galeotti & Sanjeev Goyal & Matthew O. Jackson & Fernando Vega-Redondo & Leeat Yariv, 2010. "Network Games," Review of Economic Studies, Oxford University Press, vol. 77(1), pages 218-244.
    11. repec:adr:anecst:y:2007:i:86 is not listed on IDEAS
    12. Syngjoo Choi & Edoardo Gallo & Shachar Kariv, 2015. "Networks in the laboratory," Cambridge Working Papers in Economics 1551, Faculty of Economics, University of Cambridge.
    13. Gallo, Edoardo, 2014. "Social learning by chit-chat," Journal of Economic Theory, Elsevier, vol. 153(C), pages 313-343.
    14. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
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    Cited by:

    1. 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.
    2. Syngjoo Choi & Edoardo Gallo & Shachar Kariv, 2015. "Networks in the laboratory," Cambridge Working Papers in Economics 1551, Faculty of Economics, University of Cambridge.
    3. Gallo Edoardo, 2012. "Small World Networks with Segregation Patterns and Brokers," Review of Network Economics, De Gruyter, vol. 11(3), pages 1-46, September.

    More about this item


    cognition; social networks;

    JEL classification:

    • Z1 - Other Special Topics - - Cultural Economics

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