Relative concerns and social network structure: An experiment



Speaker£ºGergely Horváth

Time£º2:00-3:20pm, Wednesday, March 13,2019

Site£ºEMS A204

Abstract£ºWe study relative concerns when individuals compete for positional advantage with their direct neighbors in a social network by purchasing a positional good. The Nash equilibrium consumption is determined by the Katz-Bonacich centrality of the individual’s network position (Ghiglino & Goyal, 2010). However, all players could increase their utility by jointly lowering their positional good consumption. In an experiment, we investigated whether individuals would play according to the Nash equilibrium or coordinate on a more efficient outcome. Interestingly, for most network structures, participants followed the Nash equilibrium. The only exception is the center of the star network, who lowered the positional good consumption, in an unsuccessful attempt to coordinate peripheral nodes on a more efficient outcome. Further, we examined the impact of network structure on the consumption of the positional good and welfare. Finally, we show that the myopic best-response dynamics model describes the learning process in the experiment.

Introduction to the Speaker£º

Gergely Horváth is currently a Lecturer in Economics (equivalent to Assistant Professor) at International Business School of the Xi'an Jiaotong Liverpool University based in Suzhou, China. He received my Ph.D. in Economics from the University of Alicante, Spain in 2011. Previously, he worked as an Assistant Professor at the School of Public Administration of the Southwestern University of Finance and Economics (Chengdu, China) between 2011 and 2014. His work has been published in peer-reviewed journals as Scandinavian Journal of Economics, Journal of Economic Behavior and Organizaition, The B.E. Journal of Theoretical Economics etc.