Strategies in Social Network Formation

Anna Conte, Daniela Di Cagno and Emanuela Sciubba

No 905, Birkbeck Working Papers in Economics and Finance from Birkbeck, Department of Economics, Mathematics & Statistics

Abstract: We run a computerised experiment of network formation where all connections are beneficial and only direct links are costly. Players simultaneously submit link proposals; a connection is made only when both players involved agree. We use both simulated and experimentally generated data to test the determinants of individual behaviour in network formation. We find that approximately 40% of the network formation strategies adopted by the experimental subjects can be accounted for as best responses. We test whether subjects follow alternative patterns of behaviour and in particular if they: propose links to those from whom they have received link proposals in the previous round; propose links to those who have the largest number of direct connections. We find that together with best response behaviour, these strategies explain approximately 75% of the observed choices. We estimate individual propensities to adopt each of these strategies, controlling for group effects. Finally we estimate a mixture model to highlight the proportion of each type of decision maker in the population.

Date: 2009-06
New Economics Papers: this item is included in nep-cse, nep-exp, nep-gth, nep-net and nep-soc
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Citations: View citations in EconPapers (9)

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https://eprints.bbk.ac.uk/id/eprint/7559 First version, 2009 (application/pdf)

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Working Paper: Strategies in Social Network Formation (2009)
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