In search of stars: Network formation among heterogeneous agents

Goeree, JK; Riedl, A; Ule, A

In search of stars: Network formation among heterogeneous agents

Goeree, JK

Riedl, A Ule, A

Permalink

Publication Type:: Journal Article
Citation:: Games and Economic Behavior, 2009, 67 (2), pp. 445 - 466
Issue Date:: 2009-11-01

Closed Access

	Filename	Description	Size
	2012005238OK.pdf		754.03 kB	Adobe PDF	View/Open

Copyright Clearance Process

Recently Added
In Progress
Closed Access

This item is closed access and not available.

Full metadata record

Field	Value	Language
dc.contributor.author	Goeree, JK https://orcid.org/0000-0001-9876-3425	en_US
dc.contributor.author	Riedl, A	en_US
dc.contributor.author	Ule, A	en_US
dc.date.issued	2009-11-01	en_US
dc.identifier.citation	Games and Economic Behavior, 2009, 67 (2), pp. 445 - 466	en_US
dc.identifier.issn	0899-8256	en_US
dc.identifier.uri	http://hdl.handle.net/10453/29793
dc.description.abstract	This paper reports results from a laboratory experiment on network formation among heterogeneous agents. The experimental design extends the Bala-Goyal [Bala, V., Goyal, S., 2000. A non-cooperative model of network formation, Econometrica 68, 1131-1230] model of network formation with decay and two-way flow of benefits by introducing agents with lower linking costs or higher benefits to others. Furthermore, agents' types may be common knowledge or private information. In all treatments, the (efficient) equilibrium network has a "star" structure. While equilibrium predictions fail completely with homogeneous agents, star networks frequently occur with heterogeneous agents. Stars are not born but rather develop: with a high-value agent, the network's centrality, stability, and efficiency all increase over time. A structural econometric model based on best response dynamics and other-regarding preferences is used to analyze individual linking behavior. Maximum-likelihood estimates of the underlying structural parameters, obtained by pooling data from several treatments, allow us to explain the main treatment effects. © 2008 Elsevier Inc. All rights reserved.	en_US
dc.relation.ispartof	Games and Economic Behavior	en_US
dc.relation.isbasedon	10.1016/j.geb.2008.12.005	en_US
dc.subject.classification	Economic Theory	en_US
dc.title	In search of stars: Network formation among heterogeneous agents	en_US
dc.type	Journal Article
utslib.citation.volume	2	en_US
utslib.citation.volume	67	en_US
utslib.for	1401 Economic Theory	en_US
utslib.for	1402 Applied Economics	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
utslib.copyright.status	closed_access
pubs.issue	2	en_US
pubs.publication-status	Published	en_US
pubs.volume	67	en_US

Abstract:

This paper reports results from a laboratory experiment on network formation among heterogeneous agents. The experimental design extends the Bala-Goyal [Bala, V., Goyal, S., 2000. A non-cooperative model of network formation, Econometrica 68, 1131-1230] model of network formation with decay and two-way flow of benefits by introducing agents with lower linking costs or higher benefits to others. Furthermore, agents' types may be common knowledge or private information. In all treatments, the (efficient) equilibrium network has a "star" structure. While equilibrium predictions fail completely with homogeneous agents, star networks frequently occur with heterogeneous agents. Stars are not born but rather develop: with a high-value agent, the network's centrality, stability, and efficiency all increase over time. A structural econometric model based on best response dynamics and other-regarding preferences is used to analyze individual linking behavior. Maximum-likelihood estimates of the underlying structural parameters, obtained by pooling data from several treatments, allow us to explain the main treatment effects. © 2008 Elsevier Inc. All rights reserved.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/29793