Boundedly Rational Opinion Dynamics in Directed Social Networks: Theory and Experimental Evidence

42 Pages Posted: 28 Jan 2014

See all articles by Pietro Battiston

Pietro Battiston

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS)

Luca Stanca

University of Milan, Bicocca - Department of Economics; Università degli Studi di Milano-Bicocca - Center for Interdisciplinary Studies in Economics, Psychology & Social Sciences (CISEPS); Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS)

Date Written: January 27, 2014

Abstract

This paper investigates opinion dynamics and social influence in directed communication networks. We study the properties of a generalized boundedly rational model of opinion formation in which individuals aggregate the information they receive by using weights that are a function of their neighbors' indegree. We then present an experiment designed to test the predictions of the model. We find that both Bayesian updating and boundedly rational updating a la DeMarzo et al. (2003) are rejected by the data. Consistent with our theoretical predictions, the social influence of an agent is positively and significantly affected by the number of individuals she listens to. When forming their opinions, agents do take into account the structure of the communication network, although in a sub-optimal way.

Keywords: Social Networks, Learning, Social Influence, Bounded Rationality

JEL Classification: D85, D83, A14, L14, Z13

Suggested Citation

Battiston, Pietro and Stanca, Luca, Boundedly Rational Opinion Dynamics in Directed Social Networks: Theory and Experimental Evidence (January 27, 2014). University of Milan Bicocca Department of Economics, Management and Statistics Working Paper No. 267. Available at SSRN: https://ssrn.com/abstract=2385961 or http://dx.doi.org/10.2139/ssrn.2385961

Pietro Battiston

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milan, 20126
Italy

Luca Stanca (Contact Author)

University of Milan, Bicocca - Department of Economics ( email )

Piazza dell'Ateneo, Nuovo I
Milan 20126
Italy

Università degli Studi di Milano-Bicocca - Center for Interdisciplinary Studies in Economics, Psychology & Social Sciences (CISEPS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milano, 20126
Italy

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milan, 20126
Italy

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