A Game of Co-Evolution of Networks and Behaviour

2024

This paper investigates Barabási-Albert (BA) and Erdős-Rényi model and preferential attachment in different settings: social choice and social distance, news veracity and networks, Prospect theory with social choice, and Wardrop equilibrium with Braess paradox. News veracity is higher in Erdős-Rényi graph vs Barabási-Albert (BA), in the Erdős-Rényi graph spread of misinformation is higher than in the model with hubs (influential nodes). In the average social distance and education level model there is higher news veracity between most educated individuals (PhD's) more when two nodes have less than highest education. Probability of news being true (news veracity) is lowest for PhD's but gaslighting (probability of perception of being gaslighted) is highest. With a degree centrality included nodes (individuals) with lower level of education perceive higher new veracity. Price of Anarchy (PoA) is higher in Erdős-Rényi (ER) versus Barabási-Albert graph. With Prospect theory in news veracity network gain and loss lines are further way on the left from reference point, with a letter being more to left. Congestion in the market for news makes more and more agents further away from equilibrium state.

The science of social networks is a central …eld of sociological study, a major application of random graph theory, and an emerging area of study by economists, statistical physicists and computer scientists. While these literatures are (slowly) becoming aware of each other, and on occasion drawing from one another, they are still largely distinct in their methods, interests, and goals. Here, my aim is to provide some perspective on the research from these literatures, with a focus on the formal modeling of social networks and the two major types of models: those based on random graphs and those based on game theoretic reasoning. I highlight some of the strengths, weaknesses, and potential synergies between these two network modeling approaches. JEL Classi…cation Numbers: A14, C71, C72

SSRN Electronic Journal, 2015

We survey the literature on the economic consequences of the structure of social networks. We develop a taxonomy of 'macro' and 'micro' characteristics of social interaction networks and discuss both the theoretical and empirical findings concerning the role of those characteristics in determining learning, diffusion, decisions, and resulting behaviors. We also discuss the challenges of accounting for the endogeneity of networks in assessing the relationship between the patterns of interactions and behaviors.

Indian Journal of Economics, 95, 376, July 2014, 93-177., 2014

Mainstream economic analysis, importantly neoclassical economics, approaches human actions in an atomistic and isolated world, completely devoid of the social context within which human beings act. Even the developments in game theory consider only individualistic strategic behaviour when a human interacts with another individual. However, human beings always interact with many others in any society, and in many instances with a third party via an intermediary, and thus every economic behaviour is a part of a social network. The establishment of connections or links within social organisations plays a central role in economic behaviour and the position and distance within networks enable the actors in acquiring or disseminating information and thus networks matter for economic behaviour. Sociology and Physics have shown that social networks follow more generally a power law-links grow exponentially-and that there exists a small world-each one is connected with everyone-and the statistical and economic approaches have established the measures and estimations for various properties of such a social network. As the use of such a powerful concept-SNA-is rarely used in the Indian economics literature, this paper aims to present the methodology of the social network analysis and its applications in economics. The concepts and measures of social networks, network formation, behaviour on networks and dynamic evolution of networks are discussed, with emphasis on economic and econometric applications. This brief outline of social network analysis highlights the potential implications of SNA for an improved and better understanding of human economic behaviour and their interactions through social relations in the small world of economics.

SSRN Electronic Journal, 2000

In three chapters I study the formation of social networks, and the impact the structures that arise may have in various economic settings. First, I develop a model of social network formation with heterogeneous agents and incomplete information. The model predicts an equilibrium in which agents sort themselves into ``insiders'' and ``outsiders.'' Insiders form many links to one another, and form a dense core structure in the network, while outsiders coordinate their links by connecting to an insider, and form a sparse periphery . Networks form stochastically, contingent on the private values of each agent, and include more realistic structures than networks arising among homogenous agents. I characterize the set of equilibria and identify its extremes, which have a natural interpretation as public good provision. One extreme, when agents are all insiders, is equivalent to the provision of a pure public good, and suffers from free-riding. The other extreme, when ever...

Empirical literature shows that ex-ante asymmetries across players arise quite naturally in social network formation. In this work, a very general kind of heterogeneity is considered, and two different models of network formation are introduced corresponding to different kind of disutility of establishing direct connections. These models are games with vector valued payoffs which are here investigated by using the concept of Pareto-Nash equilibrium and its refinements. The processes of information diffusion within a group of individuals and their implication on how they affect social learning have attracted increasing interest in the economics literature. The analysis of these issues has developed in various directions; for instance, a first approach considers non-strategic agents while, in the literature on social networks, individuals are identified with the vertices of a graph and create strategically relationships (links) within the others in such a way that the level of connect...

RePEc: Research Papers in Economics, 2009

We introduce a tractable model of cheap talk among players located on networks. In our model, a player can send a message to another player if and only if he is linked to him. We derive a sharp equilibrium and welfare characterization which reveals two basic insights. In equilibrium, the willingness of a player to communicate with a neighbor decreases with the number of opponents who communicate with the neighbor. The ex-ante equilibrium welfare of every player increases not only with the number of truthful reports transmitted in the network, but also when truthful reports are more evenly distributed across players. We apply our findings to the analysis of homophily in communities, to organization design, and to the study of endogenous network formation. Communication across communities decreases as communities become larger, and communication may be asymmetric: From large communities to small ones. In our set up, fully decentralized organizations maximize all players' welfare. Further, decentralized networks, where information may flow asymmetrically, endogenously form in equilibrium. Finally, we introduce the possibility of public communication in networks, and identify conditions under which public communication Pareto dominates private communication.

2002

Freedom of access does not necessarily mean that information is freely shared. Thus universal access policies that provide only communication channels but do not also establish incentives for broader information sharing could widen the gap between information "haves" and "have-nots." This essay develops access and collaborative network arguments through a formal theoretical model based on the idea that an inability to explore increasingly rich opportunities for contact encourages individuals to focus their attention on their best opportunities. This can lead to the exclusion of alternative contacts. If the character of information makes dynamic interaction more valuable than one-way broadcast, then collaborative networks may form among those with the best opportunities. Based on factors such as the number of communication channels and the levels of learning and sharing that take place, the model rigorously explains how inter-agent dynamics can help the information "rich get richer" and also why "it's not just what you know but whom you know." It also suggests when networks of collaborators are stable over time. This theoretical framework serves to explain several stylized events and offers several useful insights into dynamic information sharing behaviors.

2016

The work developed in my PhD on “Networks, Social Information and Compliance” focuses on compliance (voluntary and non), diffusion of information and spillovers in diverse network structures. More specifically, we test experimentally how minimal social information is diffused through different network structures and its role on increasing the level of efficiency along with its positive effect on voluntary compliance of emergent social norms and tax compliance. In the first two chapters, we implement a networked version of the trust game with two senders and one receiver. We manipulate in a minimal way the social information available in the network and, the novelty of our work consists in the introduction of non-binding suggestion about the level of trust and trustworthiness, which is totally fair and (partially) efficient. It is also manipulated in the two studies the selection mechanism of the roles in the game by introducing social status. Our findings suggest that social informa...