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Boundedly Rational Opinion Dynamics in Directed Social Networks: Theory and Experimental Evidence

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  • Pietro Battiston
  • Luca Stanca

Abstract

This paper investigates opinion dynamics and social influence in directed communication networks. We study the properties of a generalized boundedly rational model of opinion formation in which individuals aggregate the information they receive by using weights that are a function of their neighbors' indegree. We then present an experiment designed to test the predictions of the model. We find that both Bayesian updating and boundedly rational updating à la DeMarzo et al. (2003) are rejected by the data. Consistent with our theoretical predictions, the social influence of an agent is positively and significantly affected by the number of individuals she listens to. When forming their opinions, agents do take into account the structure of the communication network, although in a sub-optimal way.

Suggested Citation

  • Pietro Battiston & Luca Stanca, 2014. "Boundedly Rational Opinion Dynamics in Directed Social Networks: Theory and Experimental Evidence," Working Papers 267, University of Milano-Bicocca, Department of Economics, revised Jan 2014.
  • Handle: RePEc:mib:wpaper:267
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    References listed on IDEAS

    as
    1. Buechel, Berno & Hellmann, Tim & Klößner, Stefan, 2015. "Opinion dynamics and wisdom under conformity," Journal of Economic Dynamics and Control, Elsevier, vol. 52(C), pages 240-257.
    2. Gale, Douglas & Kariv, Shachar, 2003. "Bayesian learning in social networks," Games and Economic Behavior, Elsevier, vol. 45(2), pages 329-346, November.
    3. Stefano DellaVigna & Matthew Gentzkow, 2010. "Persuasion: Empirical Evidence," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 643-669, September.
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    10. Jadbabaie, Ali & Molavi, Pooya & Sandroni, Alvaro & Tahbaz-Salehi, Alireza, 2012. "Non-Bayesian social learning," Games and Economic Behavior, Elsevier, vol. 76(1), pages 210-225.
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    12. Peter M. DeMarzo & Dimitri Vayanos & Jeffrey Zwiebel, 2003. "Persuasion Bias, Social Influence, and Unidimensional Opinions," The Quarterly Journal of Economics, Oxford University Press, vol. 118(3), pages 909-968.
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    Citations

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    Cited by:

    1. Buechel, Berno & Hellmann, Tim & Klößner, Stefan, 2015. "Opinion dynamics and wisdom under conformity," Journal of Economic Dynamics and Control, Elsevier, vol. 52(C), pages 240-257.
    2. Brandts, Jordi & Giritligil, Ayça Ebru & Weber, Roberto A., 2015. "An experimental study of persuasion bias and social influence in networks," European Economic Review, Elsevier, vol. 80(C), pages 214-229.
    3. David Goldbaum, 2016. "Conformity and Influence," Working Paper Series 35, Economics Discipline Group, UTS Business School, University of Technology, Sydney.
    4. Berno Büchel & Stefan Klößner & Martin Lochmüller & Heiko Rauhut, 2018. "The Strength of Weak Leaders - An Experiment on Social Influence and Social Learning in Teams," Working Papers 2018.02, Fondazione Eni Enrico Mattei.
    5. repec:eee:jeborg:v:149:y:2018:i:c:p:46-57 is not listed on IDEAS

    More about this item

    Keywords

    Social Networks; Learning; Social In uence; Bounded Rationality;

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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