Dessi, R., Gallo, E. and Goyal, S.

Network Cognition

Journal of Economic Behavior and Organization

Vol. 123 pp. 78-96 (2016)

Abstract: We study individual ability to memorize and recall information about friendship networks using a combination of experiments and survey-based data. In the experiment subjects are shown a network, in which their location is exogenously assigned, and they are then asked questions about the network after it disappears. We find that subjects exhibit three main cognitive biases: (i) they underestimate the mean degree compared to the actual network; (ii) they overestimate the number of rare degrees; (iii) they underestimate the number of frequent degrees. We then analyze survey data from two â€˜realâ€™ friendship networks from a Silicon Valley firm and from a University Research Center. We find, somewhat remarkably, that individuals in these real networks also exhibit these biases.

Keywords: Networks; Cognition; Degree distributions; Biases

Author links: Sanjeev Goyal Edoardo Gallo

Publisher's Link: http://dx.doi.org/10.1016/j.jebo.2015.11.015