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An Experimental Study of Network Formation with Limited Observation

Michael Caldara () and Michael McBride ()
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Michael Caldara: Economic Science Institute, Chapman University

No 141501, Working Papers from University of California-Irvine, Department of Economics

Abstract: Many social and economic networks emerge among actors that only partially observe the network when forming network ties. We ask: what types of network architectures form when actors have limited observation, and does limited observation lead to less efficient structures? We report numerous results from a laboratory experiment that varies both network observation and the cost of forming links. Overall, we find that limited network observation does not inevitably lead to highly inefficient networks but instead might actually inhibit inefficient positional jockeying among actors.

Keywords: Networks; Limited observation; Coordination (search for similar items in EconPapers)
JEL-codes: C92 D83 D85 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2014-07
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-exp, nep-gth, nep-net, nep-soc and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:irv:wpaper:141501

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