Large Scale Experiments on Networks: A New Platform with Applications

Frederic Moisan, Syngjoo Choi and Sqnjeev Goyal. 

We present a new platform for large scale network experiments in continuous time that allows us to study the economic principles underlying the emergence of well-known social and economic phenomena. The versatility of the platform is illustrated through various experiments on network formation with groups ranging from 8 to 100 subjects. These experiments provide important insights into the emergence of influencers and connectors in social communication networks, and the emergence of dominant intermediaries in trading networks. Our experimental results reveal that subjects create sparse networks that are either centralized and unequal, or dispersed and equal. Those networks are almost always highly efficient. Although the network structures are in line with theoretical predictions, we find powerful effects of the group size, payoff information (as perceived by subjects), and the incentive structure on individual investments in linking and effort.