Agent-based Simulation Analysis for Network Formation

In this paper, we conduct agent-based simulation experiments for network formation analysis. In the published papers, Bala and Goyal (2000) have constructed a mathematical model leading a star network to be strict Nash equilibrium. However, Berninghaus et al. (2007) have conducted the laboratory experiments using human subjects basing on the mathematical model, and the result of the experiments indicates that human subjects do not always make decision just as the mathematical model predicted. In this paper, we propose a simulation model using the adaptive artificial agents to clarify the reason of the deviation from the mathematical predictions

Construction of Mathematical Model for Network Formation Based on Solution Concept of Correlated Equilibrium

Berninghaus et al. (2007) slightly modify the mathematical model of network formation by Bala and Goyal (2000), and show that a periphery-sponsored star network is a strict Nash equilibrium. To examine the validity of this model, they also conduct laboratory experiments, and obtain inconsistent results with the theoretical prediction. In this paper, assuming implicit coordination of players in network formation processes, we give an explanation for the behavior of the experimental subjects from a point of view of the notion of correlated equilibria