Myopic or Farsighted? An Experiment on Network Formation
Data
30.05.2011
30.05.2011
Autori
Marco Mantovani, Georg Kirchsteiger, Ana Mauleon, Vincent Vannetelbosch
Codice JEL
D85, C91, C92
D85, C91, C92
Parole chiave:
Network Formation, Experiment, Myopic and Farsighted Stability
Network Formation, Experiment, Myopic and Farsighted Stability
Publisher
Climate Change and Sustainable Development
Climate Change and Sustainable Development
Editor
Carlo Carraro
Carlo Carraro
Pairwise stability (Jackson and Wolinsky, 1996) is the standard stability concept in network formation. It assumes myopic behavior of the agents in the sense that they do not forecast how others might react to their actions. Assuming that agents are farsighted, related stability concepts have been proposed. We design a simple network formation experiment to test these theories. Our results provide support for farsighted stability and strongly reject the idea of myopic behavior.