Resource sharing on endogenous networks

In this paper, we examine behavior in a voluntary resource sharing game that incorporates endogenous network formation; an incentive problem that is increasingly common in contemporary digital economies. Using a laboratory experimental implementation of repeated play in this information-rich decision setting, we examine the effects of a simple reputation feedback system on patterns of linking and contribution decisions. Reduced-form estimates find significant effects of the information treatment on a number of key outcomes such as efficiency, complementarity, and decentralization. To further understand the driving causes of these observed changes in behavior, we develop and estimate a discrete-choice framework, using computationally efficient panel methods to identify the structure of social preferences in this setting. We find that the information treatment focuses reciprocity, and helps players coordinate to reach more efficient outcomes.