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Network Cognition

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

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    Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8732.

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    Date of creation: Jan 2012
    Date of revision:
    Handle: RePEc:cpr:ceprdp:8732
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    1. repec:cup:cbooks:9780521857406 is not listed on IDEAS
    2. 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.
    3. repec:cup:cbooks:9780521674096 is not listed on IDEAS
    4. Sanjeev Goyal, 2007. "Introduction to Connections: An Introduction to the Economics of Networks
      [Connections: An Introduction to the Economics of Networks]
      ," Introductory Chapters, Princeton University Press.
    5. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
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