Exclusion and Cooperation in Social Network Experiments∗

This study examines the evolution of social networks within groups of six subjects playing a prisoners dilemma game. In each round subjects cannot discriminate in their action choice but can exclude others from their social environment. Four treatments are considered, varying the cost of exclusion and the information flow through the network. Observed cooperation levels strongly depend on the treatment conditions but are always significantly higher, reaching 93 percent, compared with the control treatment with predetermined network structure. In addition, the evolution of social structure is analyzed in parallel to the dynamics of action choices. It appears that when cooperators stay connected in cliques separated from defectors, cooperation remains high until the last rounds. JEL Classification Number: C72, C91, C92, D83, H41