Network structure and strategic investments: An experimental analysis

• 成果类型: Article
• 署名作者: Rosenkranz, Stephanie; Weitzel, Utz
• 署名单位: Utrecht University; Radboud University Nijmegen
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2012.02.003
• 发表日期: 2012
• 页码: 898-920
• 关键词: Social networks; experiment; COORDINATION; Strategic substitutes; risk aversion

摘要

This paper experimentally analyzes the effect of network structures on individuals' decisions in a game of strategic substitutes. The theoretical basis for our experiment is the model of Bramoulle and Kranton (2007). As predicted, we find that individuals are able to coordinate on equilibria, but that coordination strongly depends on the network structure. Despite frequent coordination failures, in graphs of size N = 4 equilibrium play seems easier on network architectures with high (low) density and low (high) centrality. If play converges, it almost exclusively does so towards the predicted equilibria. Theoretical results with respect to welfare are also confirmed. Next to global graph structural properties we also explore the effects of local and individual factors. We find that behavior on networks is affected by the number of (direct) neighbors, but not by individuals' risk attitudes. Apparently, the global and the local structure of a network does not leave much explanatory room for individual effects that pertain to risk taking. (C) 2012 Elsevier Inc. All rights reserved.