Myopic or Farsighted? An Experiment on Network Formation

Georg Kirchsteiger, Vincent Vannetelbosch, Ana Mauleon and Marco Mantovani

No 8263, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Pairwise stability (Jackson and Wolinsky, 1996) is the standard stability concept in network formation. It assumes myopic behavior of the agents in the sense that they do not forecast how others might react to their actions. Assuming that agents are farsighted, related stability concepts have been proposed. We design a simple network formation experiment to test these theories. Our results provide support for farsighted stability and strongly reject the idea of myopic behavior.

Keywords: Myopic and farsighted stability; Network formation; Experiment (search for similar items in EconPapers)
JEL-codes: C91 C92 D85 (search for similar items in EconPapers)
Date: 2011-02
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Citations: View citations in EconPapers (12)

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Working Paper: Myopic or Farsighted? An Experiment on Network Formation (2011)
Working Paper: Myopic or farsighted? An experiment on network formation (2011)
Working Paper: Myopic or Farsighted? An Experiment on Network Formation (2011)
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