Journal of Evolutionary Economics

, Volume 17, Issue 3, pp 317–347 | Cite as

Evolution of networks—an experimental analysis

  • Siegfried K. Berninghaus
  • Karl-Martin Ehrhart
  • Marion Ott
  • Bodo Vogt
Regular Article

Abstract

It is the main aim of our paper to study network formation in experimental setups in discrete and continuous time. Our design is inspired by the theoretical model on network formation by Bala and Goyal (Econometrica, 68(5): 1181–1229, 2000) as well as the experiments by Callander and Plott (J. Public Econ., 89: 1469–1495, 2005) and Falk and Kosfeld (IEW Working Paper, University of Zürich, Zürich, Switzerland, No. 146, 2003). In particular, we analyze the role of star-shaped networks which are strict Nash-equilibria of the corresponding network formation game. Our experimental results show that strict Nash networks prove to be a good indicator for predicting network formation, particularly in continuous time. In explaining our results, it turns out that, among others, the complexity in coordinating on stars, the inequity aversion against unequal payoff distribution in the network, and the groups’ degrees of activity are the most important determinants for the formation of strict Nash networks.

Keywords

Network formation Nash networks Network experiments 

JEL Classifications

C72 C78 C92 

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Copyright information

© Springer-Verlag 2007

Authors and Affiliations

  • Siegfried K. Berninghaus
    • 1
  • Karl-Martin Ehrhart
    • 1
  • Marion Ott
    • 1
  • Bodo Vogt
    • 2
  1. 1.Institute WiORUniversity of KarlsruheRechenzentrumGermany
  2. 2.IMWFUniversity of MagdeburgMagdeburgGermany

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