Myopic or Farsighted? An Experiment on Network Formation

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.


Issue Date:
2011-06
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/108256
Total Pages:
32
JEL Codes:
D85; C91; C92
Series Statement:
CCSD
45.2011




 Record created 2017-04-01, last modified 2017-08-26

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