Network Cognition

Dessí, Roberta, Edoardo Gallo and Sanjeev Goyal
Authors registered in the RePEc Author Service: Roberta Dessi

No 8732, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study individual ability to memorize and recall information about friendship networks using a combination of experiments and survey-based data. In the experiment 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.

Keywords: Cognition; Social Networks (search for similar items in EconPapers)
JEL-codes: D91 (search for similar items in EconPapers)
Date: 2012-01
New Economics Papers: this item is included in nep-exp, nep-net, nep-neu and nep-soc
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Related works:
Journal Article: Network cognition (2016)
Working Paper: Network Cognition (2014)
Working Paper: Network Cognition (2012)
Working Paper: Network Cognition (2012)
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