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Network Cognition

Author

Listed:
  • Dessi, Roberta
  • Gallo, Edoardo
  • Goyal, Sanjeev

Abstract

We study individual ability to memorize and recall information about friendship networks using a combination of experiments and survey-based data. In the experi- ment 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 three main cognitive biases: (i) they underestimate the mean degree compared to the actual network; (ii) they overestimate the number of rare degrees; (iii) they underestimate the number of frequent 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: (iv) network cognition is affected by the subject's location, (v) the accuracy of network cognition varies with the nature of the network, and (vi) network cognition has a significant effect on economic decisions.

Suggested Citation

  • Dessi, Roberta & Gallo, Edoardo & Goyal, Sanjeev, 2011. "Network Cognition," IDEI Working Papers 691, Institut d'Économie Industrielle (IDEI), Toulouse, revised Nov 2012.
  • Handle: RePEc:ide:wpaper:25167
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    References listed on IDEAS

    as
    1. Vega-Redondo,Fernando, 2007. "Complex Social Networks," Cambridge Books, Cambridge University Press, number 9780521857406, October.
    2. 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.
    3. 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.
    4. repec:adr:anecst:y:2007:i:86 is not listed on IDEAS
    5. Syngjoo Choi & Edoardo Gallo & Shachar Kariv, 2015. "Networks in the laboratory," Cambridge Working Papers in Economics 1551, Faculty of Economics, University of Cambridge.
    6. Dessi, Roberta & Rustichini, Aldo, 2011. "Work for Image and Work for Pay," TSE Working Papers 11-252, Toulouse School of Economics (TSE).
    7. Dessi, Roberta & Rustichini, Aldo, 2015. "Strong intrinsic motivation," IDEI Working Papers 847, Institut d'Économie Industrielle (IDEI), Toulouse.
    8. 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.
    9. 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.
    10. 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.
    11. 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.
    12. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    13. Vega-Redondo,Fernando, 2007. "Complex Social Networks," Cambridge Books, Cambridge University Press, number 9780521674096, October.
    14. Gallo, Edoardo, 2014. "Social learning by chit-chat," Journal of Economic Theory, Elsevier, vol. 153(C), pages 313-343.
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    Cited by:

    1. Chalotte Saucet & Marie Claire Villeval, 2018. "Self Confidence Spillovers and Motivated Beliefs," Working Papers 1804, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    2. Charlotte Saucet & Marie Villeval, 2018. "Motivated Memory in Dictator Games," Working Papers halshs-01781335, HAL.
    3. 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.
    4. Syngjoo Choi & Edoardo Gallo & Shachar Kariv, 2015. "Networks in the laboratory," Cambridge Working Papers in Economics 1551, Faculty of Economics, University of Cambridge.
    5. 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

    JEL classification:

    • Z1 - Other Special Topics - - Cultural Economics

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