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An Experimental Study of Network Formation with Limited Observation

Listed author(s):
  • Michael Caldara

    ()

    (Economic Science Institute, Chapman University)

  • Michael McBride

    ()

    (Department of Economics, University of California-Irvine)

Many social and economic networks emerge among actors that only partially observe the network when forming network ties. We ask: what types of network architectures form when actors have limited observation, and does limited observation lead to less efficient structures? We report numerous results from a laboratory experiment that varies both network observation and the cost of forming links. Overall, we find that limited network observation does not inevitably lead to highly inefficient networks but instead might actually inhibit inefficient positional jockeying among actors.

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File URL: http://www.economics.uci.edu/files/docs/workingpapers/2014-15/14-15-01.pdf
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Paper provided by University of California-Irvine, Department of Economics in its series Working Papers with number 141501.

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Length: 58 pages
Date of creation: Jul 2014
Handle: RePEc:irv:wpaper:141501
Contact details of provider: Postal:
Irvine, CA 92697-3125

Phone: (949) 824-5788
Web page: http://www.economics.uci.edu/

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