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Faculty of Economics

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Choi, S., Goyal, G. and Moisan, F.

Large Scale Experiments on Networks: A New Platform with Applications

CWPE2063

Abstract: This paper presents a new platform for large scale networks experiments in continuous time. The versatility of the platform is illustrated through three experiments: a game of linking, a linking game with public goods, and a linking game with trading and intermediation. Group size ranges from 8 to 100 subjects. These experiments reveal that subjects create sparse networks that are almost always highly efficient. In some experiments the networks are centralized and unequal, while in others they are dispersed and equal. These network structures are in line with theoretical predictions, suggesting that continuous time asynchronous choice facilitates a good match between experimental outcomes and theory. The size of the group has powerful effects on individual investments in linking and effort, on network structure, and on the nature of payoff inequality. Researchers should therefore exercise caution in drawing inferences about behaviour in large scale networks based on data from small group experiments.

JEL Codes: C92 D83 D85 Z13

Author links: Sanjeev Goyal  

PDF: http://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe2063.pdf

Keynes Fund Project(s):
Efficiency and Inequality in a Network Economy (JHOS)