Date Added: Jun 2009
The authors run a computerised experiment of network formation where all connections are beneficial and only direct links are costly. Players simultaneously submit link proposals; a connection is made only when both players involved agree. They use both simulated and experimentally generated data to test the determinants of individual behaviour in network formation. They find that approximately 40% of the network formation strategies adopted by the experimental subjects can be accounted for as best responses. They test whether subjects follow alternative patterns of behaviour and in particular if they: propose links to those from whom they have received link proposals in the previous round; propose links to those who have the largest number of direct connections.