ePrints

Endogenous network formation in local public goods: An experimental analysis

Lookup NU author(s): Dr Tom Lane

Downloads

• Published version [.pdf]

Licence

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License (CC BY-NC 4.0).

Abstract

© 2024. We experimentally explore public good production levels and the endogenous formation of network structures to facilitate output sharing among agents with heterogeneous production costs and consumption valuations. Results corroborate the key theoretical insights of Kinateder and Merlino (2017) characterizing how agents form core-periphery networks. However, subjects often produce more and form denser networks than predicted, which sometimes reduces efficiency. There is some tendency for behaviour to converge towards the theoretical equilibrium over repeated play. Our results help us understand the emergence of the law of the few in real-world networks, and suggest it is driven by endogenous sorting of heterogeneous agents.

Publication metadata

Author(s): Chen Y, Lane T, McDonald S

Publication type: Article

Publication status: Published

Journal: Games and Economic Behavior

Year: 2025

Volume: 150

Pages: 198-214

Print publication date: 01/03/2025

Online publication date: 16/11/2024

Acceptance date: 02/04/2018

Date deposited: 07/01/2025

ISSN (print): 0899-8256

ISSN (electronic): 1090-2473

Publisher: Academic Press Inc.

URL: https://doi.org/10.1016/j.geb.2024.10.004

DOI: 10.1016/j.geb.2024.10.004

Altmetrics

Share