Strategic Interactions in Networks: An Experimental Approach

Abstract

This paper experimentally investigates how global and local characteristics of a network influence the equilibrium selection and behavior in a network public goods game. Bramoullé et al. (2014) shows that the equilibrium of the public good game can be characterized according to the simple characteristics of the underlying network. Precisely, guided by the theoretical predictions from Bramoullé et al. (2014), I explore whether underlying networks can predict equilibrium selection and subjectsbehavior in the controlled laboratory. The data implies that 1) there is some aspect in which agents actions are consistent with the claims of Bramoullé et al.(2014), but 2) local, rather than global, characteristics of the network are more fundamental in influencing behavior and equilibrium selection. Specifically, I show that asymmetry inside of a network is a major factor that explains the actions of individual economic agents.