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Growing stars: A laboratory analysis of network formation

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  • Rong, Rong
  • Houser, Daniel
Abstract
Efficient information dispersion occurs with star networks, where small numbers of agents gather information for distribution to larger groups. Previous studies have shown that ex ante heterogeneity in payoff incentives among agents is sufficient for reliable star formation (Goeree et al., 2009). Using laboratory experiments, we show stars reliably emerge among ex ante homogeneous agents under specific institutional environments. Our results help to explain why star networks emerge frequently among homogeneous groups, particularly rural farming communities (Conley and Udry, 2010). Our findings have implications for developing countries where it is crucial to create mechanisms to promote efficient information sharing.

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  • Rong, Rong & Houser, Daniel, 2015. "Growing stars: A laboratory analysis of network formation," Journal of Economic Behavior & Organization, Elsevier, vol. 117(C), pages 380-394.
    • Handle: RePEc:eee:jeborg:v:117:y:2015:i:c:p:380-394
    DOI: 10.1016/j.jebo.2015.07.008
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    3. Liza Charroin, 2016. "The effect of sequentiality and heterogeneity in network formation games," Working Papers 1629, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    4. Dong, Lu & Huang, Lingbo & Lien, Jaimie W. & Zheng, Jie, 2024. "How alliances form and conflict ensues," Games and Economic Behavior, Elsevier, vol. 146(C), pages 255-276.
    5. Gergely Horvath & Mofei Jia, 2024. "The impact of social status on the formation of collaborative ties and effort provision: An experimental study," Papers 2403.05830, arXiv.org.
    6. Francesco Fallucchi & R. Andrew Luccasen & Theodore L. Turocy, 2017. "Behavioural types in public goods games: A re-analysis by hierarchical clutering," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 17-01R, School of Economics, University of East Anglia, Norwich, UK..
    7. Ying Chen & Tom Lane & Stuart McDonald, 2023. "Endogenous Network Formation in Local Public Goods: An Experimental Analysis," Discussion Papers 2023-02, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    8. He, Simin & Zou, Xinlu, 2024. "Public goods provision in a network formation game," Journal of Economic Behavior & Organization, Elsevier, vol. 218(C), pages 104-131.
    9. Jasmina Arifovic & Giuseppe Danese, 2018. "Homophily and Social Norms in Experimental Network Formation Games," Games, MDPI, vol. 9(4), pages 1-22, October.
    10. Lisa BREGER & Andrea SORENSEN, 2019. "Posted offers in exogenous networks: A theoretical application and experimental results," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(2(619), S), pages 21-46, Summer.
    11. Charroin, Liza, 2023. "Heterogeneity in sequential network formation games," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 107(C).
    12. Zhang, Junhuan, 2018. "Influence of individual rationality on continuous double auction markets with networked traders," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 495(C), pages 353-392.
    13. Deng, Liuchun & Sun, Yufeng, 2017. "Criminal network formation and optimal detection policy: The role of cascade of detection," Journal of Economic Behavior & Organization, Elsevier, vol. 141(C), pages 43-63.

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    More about this item

    Keywords

    Social networks; Star network formation; Cluster analysis; Experiments;
    All these keywords.

    JEL classification:

    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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