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Behavorial effects in individual decisions of network formation

Author

Listed:
  • Harmsen - van Hout, M.J.W.

    (Marketing & Supply Chain Management)

  • Dellaert, B.G.C.

    (Marketing & Supply Chain Management)

  • Herings, P.J.J.

    (Microeconomics & Public Economics)

Abstract

Network formation constitutes an important part of many social and economic processes, but relatively little is known about how individuals make their linking decisions in networks. This article provides an experimental investigation of behavioral effects in individual decisions of network formation. Our findings demonstrate that the inherent complexity of the network setting makes individuals’ choices systematically less payoff-guided and also strongly reduces their social orientation. Furthermore, we show that specific network complexity features aggravate the former effect. These behavioral effects have important implications for researchers and managers working in areas that involve network formation.
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Suggested Citation

  • Harmsen - van Hout, M.J.W. & Dellaert, B.G.C. & Herings, P.J.J., 2008. "Behavorial effects in individual decisions of network formation," Research Memorandum 019, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    • Handle: RePEc:unm:umamet:2008019
    DOI: 10.26481/umamet.2008019
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    More about this item

    JEL classification:

    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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