Superstars need Social Benefits: An Experiment on Network Formation

Boris van Leeuwen (), Theo Offerman and Arthur Schram
Additional contact information
Theo Offerman: University of Amsterdam

No 13-112/I, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: We investigate contributions to the provision of public goods on a network when efficient provision requires the formation of a star network. We provide a theoretical analysis and study behavior in a controlled laboratory experiment. In a 2x2 design, we examine the effects of group size and the presence of (social) benefits for incoming links. We find that social benefits are highly important. They facilitate convergence to equilibrium networks and enhance the stability and efficiency of the outcome. Moreover, in large groups social benefits encourage the formation of superstars: star networks in which the core contributes more than expected in the stage-game equilibrium. We show that this result is predicted by a repeated game equilibrium.

Keywords: Network formation; networked public goods; peer production; social benefits; open source software (search for similar items in EconPapers)
JEL-codes: C91 D85 H41 (search for similar items in EconPapers)
Date: 2013-08-08
New Economics Papers: this item is included in nep-cdm, nep-exp, nep-gth, nep-net and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Superstars Need Social Benefits: An Experiment on Network Formation (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20130112

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