Universität zu Köln

Charness, Gary, Feri, Francesco, Melendez-Jimenez, Miguel A. and Sutter, Matthias ORCID: 0000-0002-6143-8706 (2014). Experimental Games on Networks: Underpinnings of Behavior and Equilibrium Selection. Econometrica, 82 (5). S. 1615 - 1671. HOBOKEN: WILEY. ISSN 1468-0262

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Abstract

In this paper, we describe a series of laboratory experiments that implement specific examples of a general network structure. Specifically, actions are either strategic substitutes or strategic complements, and participants have either complete or incomplete information about the structure of a random network. Since economic environments typically have a considerable degree of complementarity or substitutability, this framework applies to a wide variety of settings. We examine behavior and equilibrium selection. The degree of equilibrium play is striking, in particular with incomplete information. Behavior closely resembles the theoretical equilibrium whenever this is unique; when there are multiple equilibria, general features of networks, such as connectivity, clustering, and the degree of the players, help to predict informed behavior in the lab. People appear to be strongly attracted to maximizing aggregate payoffs (social efficiency), but there are forces that moderate this attraction: (1) people seem content with (in the aggregate) capturing only the lion's share of the efficient profits in exchange for reduced exposure to loss, and (2) uncertainty about the network structure makes it considerably more difficult to coordinate on a demanding, but efficient, equilibrium that is typically implemented with complete information.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Charness, Gary UNSPECIFIED UNSPECIFIED UNSPECIFIED Feri, Francesco UNSPECIFIED UNSPECIFIED UNSPECIFIED Melendez-Jimenez, Miguel A. UNSPECIFIED UNSPECIFIED UNSPECIFIED Sutter, Matthias UNSPECIFIED orcid.org/0000-0002-6143-8706 UNSPECIFIED
URN:	urn:nbn:de:hbz:38-431064
DOI:	10.3982/ECTA11781
Journal or Publication Title:	Econometrica
Volume:	82
Number:	5
Page Range:	S. 1615 - 1671
Date:	2014
Publisher:	WILEY
Place of Publication:	HOBOKEN
ISSN:	1468-0262
Language:	English
Faculty:	Faculty of Management, Economy and Social Sciences
Divisions:	Center of Excellence C-SEB
Subjects:	Economics
Uncontrolled Keywords:	Keywords Language LOCAL INTERACTION; SOCIAL NETWORKS; LABOR-MARKET; COORDINATION; COOPERATION; EVOLUTION; PREFERENCES; COMPETITION; EMPLOYMENT; STABILITY Multiple languages Economics; Mathematics, Interdisciplinary Applications; Social Sciences, Mathematical Methods; Statistics & Probability Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/43106