Mantovani, Marco Kirchsteiger, Georg Mauleon, Ana Vannetelbosch, Vincent
Year of Publication:
Nota di Lavoro 45.2011
Pairwise stability (Jackson and Wolinsky, 1996) is the standard stability concept in network formation. It assumes myopic behavior of the agents in the sense that they do not forecast how others might react to their actions. Assuming that agents are farsighted, related stability concepts have been proposed. We design a simple network formation experiment to test these theories. Our results provide support for farsighted stability and strongly reject the idea of myopic behavior.
Network Formation Experiment Myopic and Farsighted Stability