Networks 2015

On behalf of CIRANO and the Sam M. Walton College of Business at the University of Arkansas, the organizers welcome you to the 4th Annual Workshop on Networks in Trade and Finance on Friday October 3 and Saturday October 4, 2014 in Fayetteville, Arkansas. This conference builds on the successful CIRANO Workshops on Networks in Trade and Finance that took place in Montreal in 2014 and 2015.

Registration

Program

Past Conferences

The Strategic Formation of Networks: Experimental Evidence

Juan D. Carrillo, University of Southern California and CEPR
Arya Gaduh, University of Southern California

We use a laboratory experiment to explore dynamic network formation in a six-player game where link creation requires mutual consent. The analysis of network outcomes suggests that the process converges to the pairwise-stable (PWS) network when a PWS network exists and not to converge to any net- work when a PWS network does not exist. When multiple Pareto-rankable PWS networks exist, subjects coordinate on the high-payoff one. The analy- sis at the single choice level indicates that the percentage of myopically ratio- nal behavior is high. Deviations from myopic rationality are more prevalent in early turns, when marginal payoff losses are small and when deviations involve excessive links that may be removed unilaterally later on.