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Myopic or Farsighted ?An Experiment on Network Formation

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  • Marco Mantovani
  • Georg Kirchsteiger
  • Ana Mauleon
  • Vincent Vannetelbosch

Abstract

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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Suggested Citation

  • Marco Mantovani & Georg Kirchsteiger & Ana Mauleon & Vincent Vannetelbosch, 2013. "Myopic or Farsighted ?An Experiment on Network Formation," Working Papers ECARES ECARES 2011-004, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:eca:wpaper:2013/76051
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. B. Hoyer, 2012. "Network Disruption and the Common Enemy Effect," Working Papers 12-06, Utrecht School of Economics.
    2. Falk Armin & Kosfeld Michael, 2012. "It's all about Connections: Evidence on Network Formation," Review of Network Economics, De Gruyter, vol. 11(3), pages 1-36, September.
    3. Michael Caldara & Michael McBride, 2014. "An Experimental Study of Network Formation with Limited Observation," Working Papers 141501, University of California-Irvine, Department of Economics.
    4. Charness, Gary & Feri, Francesco & Meléndez-Jiménez, Miguel A. & Sutter, Matthias, 2012. "Equilibrium Selection in Experimental Games on Networks," University of California at Santa Barbara, Economics Working Paper Series qt51v6w9hd, Department of Economics, UC Santa Barbara.
    5. Liza Charroin, 2016. "The effect of sequentiality and heterogeneity in network formation games," Working Papers 1629, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    6. Mariya Teteryatnikova & James Tremewan, 2015. "Stability in Network Formation Games with Streams of Payoffs: An Experimental Study," Vienna Economics Papers 1508, University of Vienna, Department of Economics.
    7. Boncinelli, Leonardo & Pin, Paolo, 2014. "Efficiency and Stability in a Process of Teams Formation," MPRA Paper 56356, University Library of Munich, Germany.
    8. Margherita Comola & Marcel Fafchamps, 2015. "An Experimental Study of Decentralized Link Formation with Competition," NBER Working Papers 21758, National Bureau of Economic Research, Inc.
    9. Pietro Battiston, 2014. "Citations are Forever: Modeling Constrained Network Formation," LEM Papers Series 2014/19, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    10. Herings, P.J.J. & Mauleon, A. & Vannetelbosch, V., 2014. "Stability of networks under level-k farsightedness," Research Memorandum 030, Maastricht University, Graduate School of Business and Economics (GSBE).
    11. Ana Mauleon & Elena Molis & Vincent Vannetelbosch & Wouter Vergote, 2014. "Dominance invariant one-to-one matching problems," International Journal of Game Theory, Springer;Game Theory Society, vol. 43(4), pages 925-943, November.
    12. A. Stefano Caria & Marcel Fafchamps, 2015. "Can Farmers Create Efficient Information Networks? Experimental Evidence from Rural India," CSAE Working Paper Series 2015-07, Centre for the Study of African Economies, University of Oxford.
    13. Carrillo, Juan D & Gaduh, Arya, 2012. "The Strategic Formation of Networks: Experimental Evidence," CEPR Discussion Papers 8757, C.E.P.R. Discussion Papers.
    14. Egbert, Henrik & Sedlarski, Teodor, 2011. "Exploring Impact: Negative Effects of Social Networks," MPRA Paper 56688, University Library of Munich, Germany.
    15. Liza Charroin, 2016. "The effect of sequentiality and heterogeneity in network formation games," Working Papers halshs-01368067, HAL.
    16. Offerman, Theo & Schram, Arthur & Van Leeuwen, Boris, 2014. "Competition for status creates superstars: An experiment on public good provision and network formation," IAST Working Papers 14-16, Institute for Advanced Study in Toulouse (IAST).

    More about this item

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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