Network architecture, salience and coordination

Abstract

This paper reports the results of an experimental investigation of dynamic games in net works. In each period, the subjects simultaneously choose whether or not to make, irreversible contribution to the provision of an indivisible public good. Subjects observe the past actions of other subjects if and only if they are connected by the network. NE works may be incomplete so subjects are asymmetrically informed about the actions other subjects in the same network, which is typically an obstacle to the attainment of efficient outcome. For all networks, the game has a large set of (possibly inefficient) equilibrium outcomes. Nonetheless, the network architecture makes certain strategies salie and this in turn facilitates coordination on efficient outcomes. In particular, asymmetric in the network architecture encourage two salient behaviors, strategic delay and strategic commitment. By contrast, we find that symmetries in the network architecture can lead mis-coordination and inefficient outcomes. (C) 2011 Elsevier Inc. All rights reserved.