“The Effects of Shocks on Social Mutliplex Networks: A Comparative Analysis of Experimental and Simulated Behavior in Small Networks.”
Status: Under review
Abstract: Agents have numerous incentives to form social networks. Moreover, their position within these networks can significantly affect their health and economic standing. Past research has argued that, despite the cost of forming ties, agents can benefit directly from the tie itself, and indirectly through triadic closure or spillover ties across layers in a multiplex network. What is less understood is the mechanisms governing the evolution of these connections, especially when agents are pushed out of equilibrium via shocks. We elucidate these mechanisms via a human experiment in which subjects can form ties with each other to increase their individual utility. After several rounds, some or all subjects are shocked: the cost of ties dramatically increases or decreases. We show that shocks have two unexpected effects on agents. First, shocks spread: unshocked agents act more like shocked agents when other agents are shocked. Second, a shocked agent’s behavior changes more dramatically when more agents are shocked. We compare the experiment to simulations in which agents are myopically rational, a common assumption of many models, but these agents can make random moves to model imperfect human behavior. We find disagreement that points to agents working together to form dense networks. The effect of this is two-fold: experimental subjects’ utilities significantly outperform those of simulated agents when tie-costs are low. However, when tie-costs are high, excessive cooperation creates negative utility. We end by discussing the implications of these results for real-world networks.
This paper is a result of work supported by the SPINS research group at UC Davis.