Network Formation and Disruption - An Experiment: Are Efficient Networks Too Complex?

20 Pages Posted: 12 Apr 2017  

Sonja Brangewitz

Paderborn University

Behnud Mir Djawadi

Paderborn University

Angelika Endres

Paderborn University

Britta Hoyer

Paderborn University

Multiple version iconThere are 2 versions of this paper

Date Written: April 12, 2017

Abstract

We experimentally study the emergence of networks under a known external threat. To be more specific, we deal with the question if subjects in the role of a strategic Designer are able to form safe and efficient networks while facing a strategic Adversary who is going to attack their networks. This investigation relates theoretical predictions by Dziubinski and Goyal (2013) to actual observed behaviour. Varying the costs for protecting nodes, we designed and tested two treatments with different predictions for the equilibrium network. Furthermore, the influence of the subjects' farsightedness on their decision-making process was elicited and analysed. We find that while subjects are able to build safe networks in both treatments, equilibrium networks are only built in one of the two treatments. In the other treatment, predominantly safe networks are built but they are not efficient. Additionally, we find that farsightedness --as measured in our experiment - has no influence on whether subjects are able to build safe or efficient networks.

Keywords: Networks, Experiment, Network Design, Network Defence, Network Disruption

JEL Classification: C91, D85, L14

Suggested Citation

Brangewitz, Sonja and Mir Djawadi, Behnud and Endres, Angelika and Hoyer, Britta, Network Formation and Disruption - An Experiment: Are Efficient Networks Too Complex? (April 12, 2017). Available at SSRN: https://ssrn.com/abstract=2951680 or http://dx.doi.org/10.2139/ssrn.2951680

Sonja Brangewitz

Paderborn University ( email )

Warburger Str. 100
Paderborn, 33098
Germany

Behnud Mir Djawadi

Paderborn University ( email )

Warburger Str. 100
Paderborn, 33098
Germany

Angelika Endres

Paderborn University ( email )

Warburger Str. 100
Paderborn, 33098
Germany

Britta Hoyer (Contact Author)

Paderborn University ( email )

Warburger Str. 100
Paderborn, 33098
Germany

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