The Spread of Free-Riding Behavior in a Social Network
نویسنده
چکیده
We study a model where agents, located in a social network, decide whether to exert e¤ort or not in experimenting with a new technology (or acquiring a new skill, innovating, etc.). We assume that agents have strong incentives to free ride on their neighborse¤ort decisions. In the static version of the model e¤orts are chosen simultaneously. In equilibrium, agents exerting e¤ort are never connected with each other and all other agents are connected with at least one agent exerting e¤ort. We propose a mean- eld dynamics in which agents choose in each period the best response to the last periods decisions of their neighbors. We characterize the equilibrium of such a dynamics and show how the pattern of free riders in the network depends on properties of the connectivity distribution. JEL classi cation: C45, C73, D00, D83, D85, H41. I am grateful to Juan Moreno-Ternero for valuable comments and suggestions. Thanks are also due to the audience at the Summer School in Political Economy and Social Choice (Torremolinos, 2007). Financial support from the Spanish Ministry of Education and Science through grant SEJ2006-27589-E, FEDER and Barcelona Economics-XREA is gratefully acknowledged.
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