A Caltech Library Service

Principles of network development and evolution: An experimental study

Callander, Steven and Plott, Charles R. (2003) Principles of network development and evolution: An experimental study. Social Science Working Paper, 1156R. California Institute of Technology , Pasadena, CA. (Unpublished)

[img] PDF (sswp 1156R - Dec. 14, 2003) - Updated Version
See Usage Policy.

[img] PDF (sswp 1156 - Jul. 2002) - Submitted Version
See Usage Policy.


Use this Persistent URL to link to this item:


This paper reports on an experimental investigation of the evolution of networks and the individual decision making processes that guide it. Since there is no history of experimental work on network formation, part of the paper is devoted to the formulation of problems that can be examined experimentally. The results are that networks, composed of decentralized decision makers, are capable of overcoming complex coordination and learning problems and converge to stationary configurations. While stationarity is frequently observed, such an achievement is not guaranteed and when it doesn’t occur significant and persistent inefficiencies can result. The models of equilibration based on the principle of Nash equilibrium are more reliable than models based on the alternative principles of efficiency seeking or focalness of the network configuration. However, individual decision making within networks is not in accordance with the simple decision rule of Nash best response. Instead we observe complicated strategies that appear to trade short term profits in order to signal to, and teach, other agents the strategies required for long term profit maximization.

Item Type:Report or Paper (Working Paper)
Related URLs:
URLURL TypeDescription ItemPublished Version
Alternate Title:Networks: An experimental study
Additional Information:Revised. Originally dated to July 2002. The financial support of the Laboratory of Experimental Economics and Political Science at Caltech is gratefully acknowledged. Published as Steven Callander, Charles R. Plott, Principles of network development and evolution: an experimental study, Journal of Public Economics, Volume 89, Issue 8, August 2005, Pages 1469-1495
Group:Social Science Working Papers
Funding AgencyGrant Number
Caltech Laboratory for Experimental Economics and Political ScienceUNSPECIFIED
Series Name:Social Science Working Paper
Issue or Number:1156R
Record Number:CaltechAUTHORS:20171103-163812869
Persistent URL:
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:82967
Deposited By: Jacquelyn Bussone
Deposited On:06 Nov 2017 19:20
Last Modified:03 Oct 2019 19:00

Repository Staff Only: item control page