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Superstars need social benefits: an experiment on network formation
Schram, Arthur; Van Leeuwen, B.; Offerman, Theo
Universitat Autònoma de Barcelona. Departament d'Economia de l'Empresa
We investigate contributions to the provision of public goods on a network when efficient provision requires the formation of a star network. We provide a theoretical analysis and study behavior is a controlled laboratory experiment. In a 2x2 design, we examine the effects of group size and the presence of (social) benefits for incoming links. We find that social benefits are highly important. They facilitate convergence to equilibrium networks and enhance the stability and efficiency of the outcome. Moreover, in large groups social benefits encourage the formation of superstars: star networks in which the core contributes more than expected in the stage-game equilibrium. We show that this result is predicted by a repeated game equilibrium.
33 - Economia
Béns públics
Anàlisi de xarxes (Planificació)
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49 p.
Working Paper
Universitat Autònoma de Barcelona. Departament d'Economia de l'Empresa
Document de treball (Universitat Autònoma de Barcelona. Departament d'Economia de l'Empresa);13/6

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