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Searching for "Stars" - Recent Experimental Results on Network Formation

Berninghaus, Siegfried K.; Ehrhart, Karl-Martin; Ott, Marion; Vogt, Bodo

Inspired by the theoretical results on network formation by Bala and Goyal (2000) and
experimental evidence by Plott and Callander (2002) and Falk and Kosfeld (2003) we design
network formation experiments in discrete and continuous time. Particularly in the
continuous time experiment, we observe that many groups not only reach a strict Nash
network but also switch to other strict Nash networks during the course of time. Strict
Nash networks, therefore, prove to be a good indicator for predicting network formation.
In explaining our results, we highlight the role of the complexity of network structures,
of inequity aversion, and the players’ activity levels as most important determinants for
forming strict Nash networks.

Zugehörige Institution(en) am KIT Institut für Wirtschaftstheorie und Operations Research (WIOR)
Sonderforschungsbereich 504 der Universität Mannheim (SFB 504)
Publikationstyp Forschungsbericht
Jahr 2004
Sprache Englisch
Identifikator KITopen-ID: 1000004143
Verlag Univ., Mannheim
Serie Working paper series. SonderForschungsBereich 504 ; 04-34
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