Social Networks 34 (2012) 539–548

Contents lists available at SciVerse ScienceDirect

Social Networks
journal homepage: www.elsevier.com/locate/socnet

Producing public goods in networks: Some effects of social comparison and

endogenous network change
Johannes Zschache ∗
University of Leipzig, Institute of Sociology, Beethovenstraße 15, 04107 Leipzig, Germany

a r t i c l e i n f o a b s t r a c t

Keywords: As actors participate in the production of public goods, processes of social comparison may affect the
Public goods decisions about the individual contributions as well as the endogenously changing structure of an under-
Social comparison lying social network. This leads to the transformation of an ordinary n-player Prisoner’s Dilemma of
Network structure
collective action into an n-player coordination game. The paper uses agent-based simulations to trace
Agent-based simulation
the formation of public goods while varying network characteristics, such as density, segregation, or the
strength of relationships. Additionally, the usage of both a forward- and a backward-looking agent model
shows possible implications of different assumptions about the actors’ decision making.
© 2012 Elsevier B.V. All rights reserved.

1. Introduction production, it has been shown theoretically (Eguíluz et al., 2005;

A social dilemma of public goods arises because of a conflict
between personal interests and a socially optimal outcome. In this
case, a large group of independent actors need additional selective
incentives to ensure widespread contributions (Olson, 1971). Some
of these incentives are supported by social networks because rela-
tionships between group members facilitate monitoring and social
control (Homans, 1958; Oliver, 1980; Hechter, 1988; Heckathorn,
1990; Coleman, 1990; Granovetter, 2005). But the impact of a
social network may not be strictly positive in regard to public good
contributions. Strong relationships or a dense network can indeed
facilitate but also constrain the individual participation. There are
two possible reasons for this. First, people value friendship and
try to avoid jeopardizing their future relationships by punishing
non-cooperation (Flache, 1996; Gould, 2003). And second, people
tend to compare their own contributions with the efforts under-
taken by others (Elster, 1989; Gould, 1993a). Even well embedded
network members fail to participate in collective action if nobody
else contributes. Various empirical studies (Gould, 1993b; Opp and
Gern, 1993; McAdam and Paulsen, 1993; Anthony, 2005) suggest
that it is rather the connection to other highly engaging actors that
triggers an own contribution.
If the social network affects the individual behaviour, the actors
can control this influence by entering new relationships or leav-
ing existing ones. While online experiments conducted by Suri
and Watts (2010) suggest that differences in a fixed network
topology have no significant effect on the level of public good
∗ Tel.: +49 341 9735643; fax: +49 341 9735669.
E-mail address: zschache@sozio.uni-leipzig.de
Santos et al., 2006; Hanaki et al., 2007) and empirically (Fehl et al.,
2011; Rand et al., 2011) that an endogenously changing network
promotes cooperation in repeated games. While those related stud-
ies exclusively consider the n-way Prisoner’s Dilemma, this paper
investigates the problem of producing public goods, defined as an
n-person Prisoner’s Dilemma. The main differences are that, in an
n-way Prisoner’s Dilemma, each actor directly interacts with every-
body else in 2-person games, and, hence, the payoffs depend on
actions that are directed towards a particular player (Macy, 1991, p.
826). In contrast, a public good is jointly produced, and nobody can
be excluded from its benefits. Thus, the public goods game describes
a different, yet often occurring, social situation.
Motivated by similar findings, Takács et al. (2008) present a
game-theoretical analysis of network change in situations of col-
lective action. In their model, the actors profit from the existence
of contacts with similar behaviour because they take not only the
reward from a public good but also different kinds of benefits from
social comparison into account. The response to social pressure
might be to change the own decision about participating in the
collective action. But additionally, the authors allow their actors to
strategically adjust their social relationships. Both processes make
it is possible to escape an unpleasant feeling that stems from social
comparison. The analysis in Takács et al. (2008) concentrates on
the effects of collective action on network stability. The authors
state under which structural conditions no actor has an incentive
to adjust his strategy or relationships. Less attention is given to the
level of collective action that can be maintained despite or because
of the change in network relations.
As an attempt to continue the research of Takács et al.
(2008), this paper identifies further theoretical implications of
adding social comparison processes to a public good situation. In

0378-8733/$ – see front matter © 2012 Elsevier B.V. All rights reserved.
http://dx.doi.org/10.1016/j.socnet.2012.05.003
540 J. Zschache / Social Networks 34 (2012) 539–548
contrast to the earlier study, the following analysis aims to find
correlations between the initial network structure and the final
level of contributions. For this, we look at a group of people, in
which relationships between the group members have already
been established. You can think of any formal or informal group,
such as the members of an association or the employees of any
firm or organisation. In case of an occurring opportunity for collec-
tive action, e.g. raising money for a new, commonly used, foosball
table, organising a Christmas party, or providing information for
an online discussion forum, the existing structure of the group
might either help or prevent the production of the public good. It
is further assumed that this opportunity to produce a public good
occurs repeatedly and that the group members adjust their deci-
sions about participation and about their personal relationships in
reaction to social comparison processes regarding the other actors’
contributions.
The paper is structured as follows. Section 2 contains a formal
analysis of the problem. Because of simplifications, the presented
model differs slightly from the one in Takács et al. (2008), as will be
explained later. It turns out that the assumptions implicate a situa-
tion that is similar to an n-player coordination game. How exactly
a group develops depends, among other things, on the initial net-
work configuration as well as on the decision making processes of
the actors. In Section 3, we use computer simulations to demon-
strate this development of a group and to express a relationship
between the initial network structure and the likely outcome of
a public goods game. By definition, a simulation is an exemplary
development of a theoretical model through time. This is why,
simulation-based research is able to trace the dynamics that may
or may not converge to an equilibrium. In contrast to evolution-
ary game theory, agent-based models allow the consideration of
non-trivial underlying network structures. This is necessary for
the present study, in which four different structural parameters
are analysed: the initial level of collective action, the initial net-
work density, the initial segregation by strategy, and the strength
of the relationships as indicator of group cohesion. Additionally,
two simulations with different assumptions about the actors’ deci-
sion making processes are presented because both are empirically
sensible and have proved valuable in previous research. While the
first simulation takes an actor who is ‘forward-looking’, the second
one considers ‘backward-looking’ agents.
2. The model
Similar to the study of Takács et al. (2008), the actors of
this model receive benefits from the collective good as well as
from social contacts. To keep the model simple and its impli-
cations comprehensible, only the first of two different forms of
behavioural confirmation from Takács et al. (2008) is included.
Also the usage of costless selective incentives is omitted because
it would implicitly assume the existence of some kind of social
norm or values that need explanation in turn. This restriction to less
parameters only increases the relevance of the results since cost-
less selective incentives obviously favour the production of public
goods.
The included behavioural confirmation describes a subjectively
experienced reward that stems from the comparison of the own
action with the actions of friends and other social contacts. It can
be motivated by empirical research, as listed by Takács et al. (2008)
and as mentioned in the introduction: people are more likely to
contribute to a public good if many of their friends do so, and they
are more likely to refrain from participation if most of their friends
stay away as well. For this, the actors need not actively approve
or disapprove another person’s actions. Instead, the behavioural
confirmation, as assumed in this model, is ‘felt’ by the group
members if friends and other contacts whose actions can be
observed behave in a similar manner.
By visibly contributing to the public good or refraining from
it, the actors communicate their opinions about the appropriate
action. In order to optimise their behavioural confirmation, each
actor should adopt the action that is predominant within the group
of contacts. This adoption of the group’s prevalent opinion is known
from experimental studies in social psychology that “have shown
clearly that the presence of disagreement in a group concerning
some opinions leads to attempts to influence others who disagree
with them and also to tendencies to change own opinion to agree
more with the others in the group” (Festinger, 1954, p. 127). The
experiments show that the change in opinion is influenced by
the group’s level of cohesiveness, which is defined as the group
members’ attraction to the group (Festinger, 1950). In order to
acknowledge this finding, the following model includes costs of
network change. In a highly cohesive group, the members value
their current connections, and it is costly to end an existing rela-
tionship or to find new ones. The members of this group are, hence,
more likely to adjust their opinions about public good contributions
instead of breaking up connections to avoid negative behavioural
confirmation. On the other hand, if a group is loosely connected by
relationships with low attraction to the actors, little change in the
members’ behaviour but a high degree of structural modifications
is expected.
2.1. The public good and behavioural confirmation
First, we consider a group with a fixed network structure and
a one-shot public goods game. Let N = {1, 2, . . ., n} be a set of
n agents who have either a positive or a negative opinion about
contributing to the public good. These tendencies are given by
an n-dimensional vector xt , where xit is agent i’s opinion about
contribution at time t (xit ∈ { −1, 1}). Assuming a biconditional
relationship between opinion and action, agents with xit = 1 con-
tribute one unit to the public good (e.g. by giving their time or
money), and agents with xit = −1 abstain from contribution, i.e.
they free-ride. The vector yt describes these contributions and
is a function of the agents’ current attitudes towards participat-
ing in collective action: yt = 12 · (xt + 1). The amount of public
good that is provided by the group is equal to the sum of all yjt ,
j = 1, . . ., n, and has a natural limit of n. The unit costs of con-
tribution are denoted by c1 . In order to represent an n-person
Prisoner’s Dilemma, it must hold that c1 > 1 and c1 < n. This means
that nobody profits by making an individual contribution, but if all
agents are cooperating, they are better off than without the public
good.
The social network is modelled as an undirected and
unweighted graph (N, Rt ), such that Rt ⊆ [N]2 . The vertices of this
graph are the agents of N. The elements of Rt are 2-element sub-
sets of N. An agent i ∈ N is connected to an agent j ∈ N at time
t if and only if {i, j} ∈ Rt . If there is a connection between two
agents, they will be referred to as contacts, neighbours, or friends.
Since the graph is not weighted, there are no differences in friend-
ship. Each agent’s personal network is given by Pit = {j|{i, j} ∈ Rt },
and dit = |Pit | is the size of this set or the degree of agent i at
time t.
Consider a group (N, Rt ) that is facing a problem of collective
action and which members are characterised by a certain xt relating
to this problem. The group members may have different opinions
about the public good and choose their actions accordingly. For
example, some co-workers engage in the organisation of the office
Christmas party, while others only turn up without any contri-
bution. In the end, the public good, i.e. the party, is distributed
among all attendees. Additionally, each actor is rewarded by those
co-workers with whom they are friends and who acted similarly
 J. Zschache / Social Networks 34 (2012) 539–548
with regard to the organisation of the party. One the other hand,
punishment is felt if one of the friends acted differently. This
behavioural confirmation is defined as
 relation because network (as well as strategy) update is assumed
bit = xit · xjt .
j∈Pit
Taken together, the payoff of agent i at time t is given by

n
 firmation exceeds the costs of building this tie. However, if a new
uit = yjt + xit · xjt − c1 · yit .
j=1 j∈Pit
It is important to notice that one additional contribution to the
public good yields the same payoff as an additional contact with
xit = xjt . This, rather strict, assumptions is relevant for the subse-
quent implications of the model and should be relaxed in future
studies.
Eq. (2) implies that, given an agent and a certain configura-
tion of his personal neighbourhood, cooperation might become the
preferred strategy. More specifically, the difference between the
number of cooperating contacts dC and the number of defecting
contacts dD must exceed a particular threshold for an agent to prefer
cooperation over defection:
c1 − 1
dC − dD > . (3)
2 new lunch partners who also avoid paying for coffee. However, co-
Eq. (3) refers back to the original model in Takács and Janky (2007,
Eq. 3), but it is also somewhat different because the behavioural
confirmation in the original model does not assume a perceived
punishment from comparison with friends who act differently.
It follows from Eq. (3) that the problem of collective action is
transformed into a coordination game if the network is sufficiently
dense for the behavioural confirmation to take effect. In general,
the individually preferred strategy is to behave in the same way
as the larger part of the friends. The structure of the coordination
game that follows from the payoff function (Eq. (2)) is shown in
Table 1. The number of public good contributions (without ego’s) is
given by nC , and ego is connected to a total of d agents, of which dC
are cooperating and dD are defecting. The reward from the public
good is lower if ego cooperates (nC + 1 − c1 ) than when he defects
(nC ). The benefit from behavioural confirmation, on the other hand,
varies with the difference between the number of cooperating and
the number of defecting contacts (dC − dD ). In case of zero cooper-
ative friends, defection is the preferred strategy. However, if all of
ego’s contacts are contributors and his network degree d exceeds
1
2
· (c1 − 1), it is best to cooperate. This also means that, next to
overall defection, overall or partial cooperation can be a Nash equi-
librium. For the latter, the network must arrange the cooperative
members in a favourable way.
2.2. Endogenously changing network structures
In this second part, we look at dynamic networks where actors
are allowed to make changes in their relationships but not in their
decisions about public good contribution. As mentioned earlier,
the groups differ in cohesiveness. The higher the cohesiveness, the
harder it is to break or to form relationships. This is modelled by
including costs of network update (0 ≤ c2 ≤ 1), which are paid by an
agent for each newly formed tie and for each cancelled relationship.
Admittedly, it is unconvincing to assume that all network members
experience the same costs of network change and that removing a
tie is as expensive as adding a new one. We only consider a highly
abstract model of the reality, yet the consideration of networking
costs should shed some light on the difference in the levels of public
good production if the corresponding groups differ in cohesiveness.
While a network tie is abandoned as soon as one of the con-
nected parties prefers to delete it, the formation of a new tie
541
needs consent from both agents (in reference to pairwise stability in
Jackson and Wolinsky, 1996). If a relation is ended, only one agent
pays the costs c2 . This holds even if both partners prefer to delete the
(1) to happen asynchronously. In general, an agent i prefers to delete a
connection {i, j} if the payoff without this relation is greater than the
current payoff less the costs c2 . Accordingly, agents want to build
a new relationship if the gain from the additional behavioural con-
(2) relationship is formed, both parties must pay the amount of c2 and,
hence, need to consent to this. The decision by an agent, who was
asked to connect to another agent, is the following:
While assuming that nothing else is going to change, an agent j
gives consent to a relationship offer by i if and only if the profit
from the new strategy profile (if i plans to change his action)
including relation {i, j} exceeds the profit from the current strat-
egy profile without the relationship {i, j} plus c2 .
The mutual agreement of a new relationship prevents defecting
agents from agreeing to a relationship that will eventually harm
their payoffs. For example, an employee who pays regularly in the
office coffee kitty may consider to stop contributing. But, since he
also enjoys the lunch meetings with colleagues and wants to pre-
vent negative behavioural confirmation, this employee must find
workers who do not contribute still benefit from the kitty money
and are reluctant to encourage further free-riding by opening their
group for newcomers. This is due to the fact that, in our model, one
public good contribution yields the same reward as the behavioural
confirmation of one contact with the same attitude. Given that net-
work update always includes some costs (c2 > 0), a defecting agent
prefers the contribution of an unrelated cooperator instead of the
confirmation from another defecting friend.
In general, the network dynamics that derive from the simpli-
fied assumptions of the presented model are equal to the main
results (theorems) in Takács et al. (2008). Group members cannot
increase their benefit by cancelling ties with friends who take the
same action (theorem 1a) or by building relations to members who
act differently (theorem 2a). If c2 = 1, an update of personal rela-
tionships will not end in a more profitable outcome. But, as long
as the costs of network update are sufficiently small (c2 < 1), the
actors receive a higher reward by connecting to agents who take
the same action (theorem 2c and d) and by breaking ties to contacts
of different behaviour (theorem 1b and c). The main difference to
the earlier study is that the network is always subject to complete
segregation if c2 < 1. In this case, given a stable network, two agents
of different strategies cannot be connected, and two agents of the
same strategy must be.
3. Simulation analysis
In this section, we consider that actors can both update their
decisions about collective action participation and rearrange their
relationships. Since this makes the underlying problem sufficiently
complicated, we use agent-based simulations to analyse the cor-
relation between the initial group structure and the outcome of a
recurring public goods game. Thus, instead of presenting sufficient
or necessary conditions for a certain kind of equilibrium, the fol-
lowing simulations specify the likely development of a group of
connected people that is facing a public good situation and which
members compare their behavioural decisions.
The assumptions about the decision making process are a cru-
cial part of simulations. Up to this point, it was taken that the actors
are confronted with a one-shot public goods game and with a single
decision about the best behaviour or about the optimal composition
542 J. Zschache / Social Networks 34 (2012) 539–548

Table 1
The public goods dilemma with social benefits.

Number of cooperating contacts

ego 0 1 ··· dC ··· d

C (nC + 1) − c1 − d (nC + 1) − c1 − (d − 2) ··· (nC + 1) − c1 + (dC − dD ) ··· (nC + 1) − c1 + d

D nC + d nC + (d − 2) ··· nC − (dC − dD ) ··· nC − d

of their personal network. In the simulations, we assume a recur-

ring public goods game and that the actors continuously update
their behaviour and relations. In each situation where people con-
tribute to the public good or refrain from it, the processes of social
comparison lead to behavioural confirmation. The Christmas party
or the coffee kitty example illustrate this point quite well. In either
case, the collective action is repeated every year or even during
every week, and also the benefits from the public good as well as
from social comparison are repeatedly received.
During one simulation, the agents successively act in a random
order. The actors’ decision making implies the following steps:

Fig. 1. Initial density and the level of cooperation ( 0 = 0.5, ϑ0 = 0.5).

1. Each agent asks who of the other agents is willing to connect
with him if he continues his action or if he switches to the other
one.
2. Based on these information, the agent calculates the potential
payoffs of all possible strategy–network-combinations.
3. The agent acts according to the strategy–network-combination
with the highest payoff and minimal network change.
In step two, the actors base their calculations only on the current
situation and do not anticipate changes that may be made by other
agents in response. The actors are myopic optimisers, as there is
no common knowledge of rationality and no strategical consid-
eration of future rounds of the public goods game. The last step
contains a tie-breaking rule that is arbitrarily chosen, but it seems
sensible in regard to real life decisions to make as little changes
as necessary. The simulation terminates if no further modifications
are made by the actors, which means that nobody can unilaterally
increase his payoff by a strategy–network-combination, in which
the additional relationships have consent from the new partners.
In reference to the earlier study by Takács et al. (2008), this means
that, if the simulation terminates, the group is in a strongly robust
network equilibrium.
It is still possible to make some general remarks about the actors’
decisions. Given a single agent i, the payoff from cooperation is
greater than the payoff from defection if the following holds:
c1 + (1 − c2 ) · (n − 2 · nC ) + c2
d = (dC − dD ) > . (4)
2 · c2
Similar to the conclusions above (Eq. (3)), cooperation is indi-
vidually beneficial if there are enough agents, inside and outside
of the current neighbourhood, whose behavioural confirmation
compensates for the costs of contribution. Besides the initial net-
work density and the initial segregation of the strategies, which are
reflected in d, the strength of relationships, which is represented
by c2 , and a measure of the relative proportion of cooperators
(n − 2 · nC ) define the availability of agents that are a (potential)
source of behavioural confirmation. Hence, these four factors have
an effect on the actors’ decisions and are more closely analysed in
the following.
to 81 . All four independent variables – the initial rate of coopera-
tion  0 , the average network density ı0 , the initial segregation of
the strategies ϑ0 , and the costs of network change c2 – take values
within the range [0, 1]. The initial number of cooperators and the
individual degrees are generated following a normal distribution
with the means 1 = n ·  0 and 2 = n · ı0 ( 1,2 = 1.0). The segrega-
tion defines the fraction of contacts who take the same action; such
that, if ϑ = 0, each agent is entirely surrounded by the opposite strat-
egy, and, if ϑ = 1, the strategy groups are completely segregated. As
a side note, certain parameter constellations cannot be tested. For
instance, highly segregated networks can never be fully connected
because full connectivity demands that all agents are friends with
each other. This is precluded by complete segregation, where only
agents with the same behavioural attitude can be friends.
3.1.1. Results
Fig. 1 shows the means and standard deviations of the final
level of cooperation over 100 simulations in dependence of the ini-
tial network density. Both the value of segregation and the initial
rate of cooperation are set to 0.5. These values describe a network
with mixed neighbourhoods and equal numbers of cooperators and
defectors at the beginning of the simulation. In Fig. 2, an exemplary
development of this kind of network is pictured for a small ini-
tial network density and low costs of network change. The agents
keep their strategies and rearrange their relationships until the two
groups are completely segregated. But this only holds as long as
initial network density and costs are small (Fig. 1). There is also
no increase in cooperation since half of the agents participate in
the collective action right from the start. The main finding is that
cooperators actually sustain their contributions by structural mod-
ifications.
Result 1. In a network that is equally mixed in regard to the actors’
behaviour, low network density and low networking costs enable
cooperators to persist by adjusting their relationships.
The cooperation is sustained as the costs of cooperation c1
are outweighed by the behavioural confirmation of contributing
friends. At the same time, it must hold that these friends cannot
be substituted for defectors. Because it is always better to abstain

3.1. Simulations with forward-looking agents

1
The only reasons for these choices of the parameters are the restriction n > c1
For all of the following simulations, the total number of agents and computational limitations if the groups are too large. Further parameter ranges
is arbitrarily set to n = 50, and the costs of contribution c1 are equal should be studied in future simulations.
 J. Zschache / Social Networks 34 (2012) 539–548
Fig. 2. Network development ( 0 = 0.5, ϑ0 = 0.5, ı0 = 0.2, c2 = 0.2).
from contributing if either strategy is supported by friends, there
must be some structural condition that limits the number of avail-
able defecting friends for cooperation to last. As argued in Section
2.2, if c2 > 0, cooperators who want to stop contributing cannot
find any defectors outside of the initial neighbourhood who would
consent to a relationship. Since, in a simulation with ϑ0 = 0.5, the
agents are initially connected to both cooperators and defectors,
the contributing agents are most likely to persist if only few of
those relationships are present from the beginning and if they can
be easily rewired. This also means that in these groups, where the
members are initially not segregated and only loosely connected,
the repeated occurrence of a collective action opportunity triggers
an increasing disruption of the group. On the other hand, it is this
separation which enables the collective action to continue. Contrar-
ily, in highly cohesive groups without network update (c2 = 1), the
outcome is complete defection as in a public goods game without
behavioural confirmation.
In accordance with theorem 3 of the original study of Takács
et al. (2008), only full cooperation or full defection with complete
networks can be stable if there are no costs of network change.
In Fig. 3, the mean level of cooperation is either 0.0 or 1.0 with
zero deviation in case that c2 = 0. The final outcome depends on the
initial level of cooperation. Also for other low levels of c2 , erstwhile
shirking agents start contributing if sufficient cooperative agents
exist from the beginning. This effect is largely independent of the
initial density of the network (not shown here).
Result 2. If the costs of relationship update are low, an initial
abundance of cooperators initiates universal cooperation through
network change.
While in Result 1 only those agents who started out as coopera-
tors still contributed at the end of the simulation, Result 2 describes
situations where even defectors begin to pay their shares. This may
also happen without a overall majority of cooperators. In networks,
in which defectors are embedded in cooperative neighbourhoods,
these agents may switch to cooperation before their neighbours
can reconsider their contributions. Fig. 4 pictures the final number
of cooperators for three different levels of initial segregation (rows)
and networking costs (columns). In social networks with low seg-
regation (ϑ0 = 0.3), agents are embedded in neighbourhoods where
the opposite strategy is in majority. In contrast to groups with pro-
portionately connected members, some agents who initially refrain
from contribution switch to cooperation if networking costs are
high. Defectors start contributing because they have many coop-
erative friends that need to be exchanged at high costs. However,
after some of the agents changed to the opposite behaviour, the ini-
tial network segregation has vanished, and the other agents remain
in a network without segregation. Yet, some agents sustain coop-
eration because they are already segregated from the rest of the
group.
543
Result 3. Defectors who are embedded in cooperative neigh-
bourhoods with high costs of network change are apt to start
cooperating.
A group is most successful in sustaining cooperation if its mem-
bers are already segregated by strategy (ϑ0 = 0.7). The third row
of Fig. 4 shows that, even if network change is costly, cooperators
keep up their contributions. Again, the group splits up between
cooperators and defectors, yet a stable level of partial cooperation
can be found almost regardless of network costs and density.
Result 4. If actors are segregated by strategy, both cooperators and
defectors hold on to their strategies and change their relationships
accordingly.
As a general rule, cooperating agents decide to stop contributing
if they are able to exchange their cooperating for defecting friends
without much difficulty. As stated previously, this is impeded by
the unwillingness of defectors to encourage a cooperator’s strategy
change. Result 1 limits this effect to situations of low networking
costs and sparsely connected networks. But, given that actors are
located in subgroups of similar attitudes in regard to the collective
action, cooperators are constrained by a supportive neighbourhood,
and not many additional approving friends are needed in order to
keep them contributing. Moreover, a group is most successful in a
collective action if the members who are actually opposed to par-
ticipation are mainly friends with cooperators and cannot easily
form a separated group of free-riders.
3.2. Backward-looking agents
One of the advantages of using agent-based models as theo-
retical tool is the possibility to analyse the given problem under
varying assumptions about the actors’ decision making. While the
previous simulations computed the behaviour of (myopic) optimis-
ers who were ‘looking forward’ to the potential outcome of future
games, the agents in this section are ‘backward-looking’ or adap-
tive learners who consider only their past experiences in order to
find a satisficing response. It has been shown that assuming adap-
tive agents often reveals fruitful theoretical insights (Macy, 1991;
Young, 1998; Macy and Flache, 2002) and more accurate predic-
tions about human behaviour in some social situations (Roth and
Erev, 1995; Flache, 1996; Bendor et al., 2011). These models can
be used to relax the rather strict cognitive assumptions of classi-
cal game theory (Macy and Flache, 2002). For example, the actors
may be either not able or not willing to account for the results of
alternative behaviour and, hence, to optimise their reward. Instead,
they are guided by aspirations and ‘satisficing’ (Simon, 1955), which
means that they continue to perform a certain action as long as
the corresponding reward exceeds their aspirations without look-
ing for the optimal response. This kind of decision making can be
more cost effective and closer to real cognitive processes, especially
in situations of volunteering or collective action, where it is most
544 J. Zschache / Social Networks 34 (2012) 539–548

Fig. 3. Different levels of cooperation (ı0 = 0.2, ϑ = 0.5).

convenient to just follow social cues instead of calculating all pos- is given to the members of a completely connected and cooperat-
sible consequences (Hardin, 1982; Macy, 1990). ing group: umax = 2 · n − c1 − 1. Accordingly, the minimum payoff is
In our model, the agents repeat their current behaviour and received by a contributing agent who is fully connected, but every-
strengthen existing relationships if they are satisfied with their cur- one else is free-riding: umin = 2 − c1 − n.
rent payoffs. Satisfaction is measured socially, i.e. agents compare The aspiration level ait is the average payoff in agent i’s neigh-
themselves to their neighbours and ‘feel’ satisfied if most of the bourhood. Additionally, the aspiration level is weighted by the
neighbours do worse than or equally well as they do. If, on the payoffs of previous rounds (Bendor et al., 2004):
1  1 
other hand, the majority of their friends receive higher payoffs, the
1
agents are disappointed and look for alternative strategies and dif- ai0 = uj0 ; ait = ·a + ujt (6)
di0 2 i(t−1) 2 · dit
ferent friends. As before, the agents’ payoff is calculated by Eq. (2). j∈Pi0 j∈Pit
A vector rit specifies the current form of the personal network of
agent i at time t: rit = (rit1 , rit2 , . . , ritn )T , ritj ∈ {0, 1}, riti = 0. For all Each agent is given a propensity to cooperate pi , i ∈ N, and each
j =
/ i, the value of ritj is set to 1 if and only if agent i and agent j are relationship has a probability of existence pij , i, j ∈ N. i =
/ j. The
connected at time t ({i, j} ∈ Rt ). The personal network Pit needs to be propensity to cooperate is initially set to unity if xi0 = 1, and to
restated as Pit = {j|ritj = 1} ∪ {i}, dit = |Pit |. The payoffs are not directly zero if xi0 = −1. When receiving a satisfactory or an unsatisfactory
evaluated but compared to the average payoff of the agent’s refer- outcome, the propensity is updated according to:
ence group Pit . This process of satisficing is accounted for by the

pit + l1 · sit · (yit − pit ) sit ≥ 0
value sit , describing the individual i’s stimulus: pi(t+1) = . (7)
uit − ait pit + l1 · sit · (yit + pit − 1) sit < 0
sit = (5)
umax − umin
In Eq. (7), l1 is the learning rate (0 < l1 < 1), which specifies the
The denominator umax − umin normalises the level of satisfaction to efficiency of the stimulus sit . This conception of individual learn-
a value between −1 and 1. The maximally achievable payoff umax ing originates in the Bush–Mosteller model as used by Macy and

Fig. 4. Number of cooperators for different levels of ϑ0 , c2 ( 0 = 0.5).

 J. Zschache / Social Networks 34 (2012) 539–548 545

Fig. 5. Forward-/backward-looking agents ( 0 = 0.7, ϑ0 = 0.5, l1 = 0.1).

Flache (2002). The propensity to cooperate pit increases either
if agent i is cooperating and rewarded by a positive stimulus sit
or if he is defecting but also punished by getting an payment
below the average. In the other cases, if agent i was rewarded
for defecting or punished for cooperating, the likelihood of future
contributions decreases. The agents’ attitudes towards collec-
tive action x(t+1) are probabilistically updated according to the
propensities pi(t+1) .
A relationship’s probability of existence pij is adjusted similarly:
 conditions for Result 1.
pijt + l2 · sit · (ritj − pijt ) sit ≥ 0
pij(t+1) = . (8)
pijt + l2 · sit · (ritj + pijt − 1) sit < 0
At the beginning, pij0 = 1 if agent i and agent j are connected, and
pij0 = 0 otherwise. In Eq. (8), l2 represents the ability of network
change (0 ≤ l2 ≤ 1), which is treated as a substitute for the network
costs c2 . The probability pij is successively updated by both agents i
and j. While rearranging their personal networks, the actors do not
discriminate between cooperating and defecting group members.
As long as an agent is satisfied, all of his currently existing rela-
tionships are strengthened, regardless of the opponents’ behaviour.
Similarly, all relationships are cancelled if an agent is dissatisfied
with his total reward. On the other hand, an agent tries to built
up relationships to any network member, with whom he is not
connected yet, if the agent feels unsatisfied.
3.2.1. Results
The simulations reveal that, similar to forward-looking
agents, adaptive learners achieve the socially desired result of
cooperation through network change and under favourable con-
ditions. However, these conditions are more stringent than before.
For instance, a group of learners with equal proportions of both
strategies at the beginning ( 0 = 0.5) cannot strengthen the contri-
butions as it happens with forward-looking agents. This is because
actors of limited foresight are not capable to anticipate the potential
loss in public good yields that results from approving friends with
similar, but socially harmful, behaviour. Thus, defecting agents no
longer withhold behavioural confirmation, which was one of the
Also, backward-looking agents do not reach an equilibrium.
Therefore, the right graph of Fig. 5 plots the final level of cooperation
after 4000 iterations, averaged over 100 simulations. Generally, a
group of backward-looking agents need a significant initial major-
ity of cooperators in order to provide a public good. But if  0 is
set to 0.7, the two graphs are not too different. In either case,
effortless network update supports the diffusion of cooperation.
Especially, if network costs are low, both simulations result in
full cooperation. But the mechanisms are somewhat different for
the adaptive learners. After the compliant agents became dissat-
isfied with their current payoffs, they seek new friends outside
their original neighbourhoods. Because of the high proportion of
cooperators, these new friends are almost entirely cooperators.
With this additional contacts, the agents are mostly satisfied on
condition that they have not changed their strategies yet. This is
why the agents must be able to change their relationships more
quickly than they change their strategies. Fig. 6 displays the relation
between the efficiency of strategy update (l1 ) and the ease of build-
ing and removing relationships (l2 ). If cooperating agents switch to

Fig. 6. Learning efficiency l1 ∈ [0.1, 0.4](ı0 = 0.3,  0 = 0.7, ϑ0 = 0.5).

546 J. Zschache / Social Networks 34 (2012) 539–548
Fig. 7. Low (0.3) and high (0.7) initial segregation for learners (l1 = 0.1).
defection as soon as they feel marginally unsatisfied, there is little
opportunity for them to build up a supportive network. On the other
hand:
Result 5. If network updating is more effective than strategy
adjustments, a recurring public goods game is likely to result in
a high level of cooperation.
Furthermore, almost full cooperation can be established in many
cases, for the free-riders of the adaptive model become unsatisfied
if they are connected to a majority of cooperative agents. In contrast
to the previous simulations, the effect of network density cannot be
properly evaluated because the parameter settings of  0 = 0.7 and
ϑ0 = 0.5 preclude a initial density that is much higher than 0.3. This
becomes even more problematic in networks with high segrega-
tion, where members are not equally connected to both strategies.
The initially high rate of cooperation and the exogenous superim-
position of segregation limits the range of densities that can be
tested.
As seen in the upper row of Fig. 7, a segregated network
cannot help to provide a public good if the initial level of coop-
eration is too low. But if  0 = 0.7 (lower row), low segregation
(first column) supports cooperation in densely connected net-
works, regardless of networking costs. On the other hand, in a
network with high segregation (last column), the stabilising effect
of severe strategy segregation is not evident if the agents are adap-
tive learners. In fact, the level of cooperation is equal to the one in
the central column without segregation. The only difference is that
high segregation further narrows the range of possible network
densities.
In summary, the results of the previous section are only partly
confirmed for backward-looking agents. The intersection of the
Results 1 and 2 also holds for the learning-theoretical model. Coop-
eration prevails in networks of low density and low networking
costs, but only in groups with initially high levels of cooperation.
Both forward- and backward-looking agents attain public goods
if contributors are able to rearrange their relationships and find
contacts who confirm their behaviour. While cooperative agents
of the first model are supported by anticipating defectors who
are unwilling to form relationships to new free-riders, learning
agents must rely on favourable network conditions only. Similar
to Result 3, learning defectors who are embedded in cooperative
neighbourhoods start to participate if group density is high. The
fourth statement about the positive effect of group segregation on
partial cooperation does not result from the assumption of adaptive
actors.
4. Discussion
Recent studies that explored the emergence of cooperation in
dynamic networks have focused on the n-way Prisoner’s Dilemma,
where actors locally interact with their neighbours in 2-person
games (Eguíluz et al., 2005; Santos et al., 2006; Hanaki et al.,
2007). The strategic update of relationships is often biased towards
cooperative partners or against defecting contacts in order to sup-
port the mutually beneficial interaction of two cooperators. This
is in line with previous research where the repeated interaction
between cooperators (Axelrod, 1984), the chance to acquire rep-
utation (Raub and Weesie, 1990; Fu et al., 2008), or the option
to select partners (Orbell and Dawes, 1993; de Vos et al., 2001)
are decisive structural characteristics for the success of reciprocal
strategies (e.g. Tit-for-Tat) and cooperation.
This paper departs from these earlier approaches by, first, tak-
ing the public goods dilemma as underlying problem and, second,
assuming social comparison processes as mechanisms that lead
to strategy and network adjustments. The model is based on the
study of Takács et al. (2008), which is extended by investigating
the relationship between the initial network configuration and the
final level of the produced public good. An important finding is
that cooperation can emerge in endogenously changing networks
without the assumption of a common bias towards approving
friends who work for the socially desired state. Cooperation pre-
vails because of social comparison, advantageous initial network
configurations, and endogenous relationship adjustments.
The effect of group cohesion (the costs of network change) on
cooperation is almost consistently negative. Compliant behaviour
is more likely to sustain if the actors are able to effortlessly change
their interaction partners. One the one hand, a similar effect is sug-
gested by related research (Skyrms and Pemantle, 2000; Santos
et al., 2006; Hanaki et al., 2007). On the other hand, this is in conflict
with the traditional idea that groups with strong relationships are
capable to uphold cooperation because norms can be effectively
enforced (Coleman, 1990; Ellickson, 1991). In the present model,
strong relationships are in support of cooperative acts only if the
agents are adequately embedded in groups of cooperators.
It has also been argued that, if a norm of cooperation is already
present and obeyed by most group members, high network den-
sity usually discourages free-riding because it facilitates the flow of
information and control (Granovetter, 2005). This point is extended
by the preceding analysis: given that the network is relatively
mixed in strategies, sparsely connected groups are better suited
to promote cooperation. In support of this finding, Ohtsuki et al.
(2006) formulate a upper limit for the average network density
k that is still in support of the natural selection of cooperative
 J. Zschache / Social Networks 34 (2012) 539–548
strategies: k < bc , with b and c being benefit and cost of
an altruistic act (b > c). This rule is an approximation and
only holds for particular mechanisms of strategy update. But
still, theoretical work is able to propose plausible assumptions
about human interaction that lead to a negative relationship
between network density and the emergence of cooperative
behaviour.
It is well known that strategically rational agents with full infor-
mation and common knowledge of rationality are able to deal
with the indefinitely iterated Prisoner’s Dilemma by recognising
the advantage of mutual cooperation given the opponents’ cred-
ibility to punish one-time exploitation by irreversible defection
(Hardin, 1982; Taylor, 1987). The forward-looking agents of this
study are less sophisticated and do not consider that other players
are equally rational in their decisions. On the contrary, the agents
are guided by social cues and adopt the behaviour that promises the
most approval from friends. The distinction between forward- and
backward-looking agents is that the former are able to calculate
prospective payoffs of alternative strategy and network decisions,
given that nothing else changes. The backward-looking learners are
guided by satisfaction that results from comparing payoffs between
friends.
The behavioural models should be improved in future research.
Especially, the backward-looking model may be built on less naive
representations of adaptation and learning, such as fictitious play or
Bayesian learning (Fudenberg and Levine, 1998; Young, 2004). Also,
recent progress has been made in developing a cognitive model of
social comparison that formalises the theory of Festinger (1954)
more accurately (Fridman and Kaminka, 2010). These agent-based
models use a rather complex algorithm that is implemented as pro-
duction system (e.g. Newell, 1990). By using this cognitive model,
it is possible to more correctly present the implications of social
comparison processes on outcomes at the social level.
Further limitations of this study regard the fixation of some
parameters. Especially, it is necessary to relax the assumption that
one unit of the public goods is equally beneficial to an actor as is the
behavioural confirmation from a similarly acting friend. As men-
tioned before, this restriction is decisive for most of the results.
For instance, a lower value of behavioural confirmation would
impede the transformation of the underlying Prisoner’s Dilemma
into a coordination game. Moreover, the fact that all ties are of
equal strength is highly unrealistic and arbitrary. Social benefits are
likely to alter between contacts. First of all, the additional gain of
another behavioural confirmation usually decreases with the total
amount of social reward. Second, varying costs of maintaining per-
sonal relationships should be included. It is less time-consuming
to uphold a friendship if both parties have similar interests or
an overlapping personal network. Conversely, the longer the net-
work path to an agent, the higher the costs of building up a new
relationship.
Finally, the results must be verified on empirical data. For this,
further structural parameters, such as the apparently very impor-
tant small world structure (Watts, 1999), should be included. Also
an initial heterogeneity in structural parameters, e.g. an uniformly
distributed network degree, might have significant consequences
(Santos et al., 2006). The macroscopic nature of the variables makes
the empirical analysis of the resulting hypotheses more difficult.
However, they may be successfully tested in online communities,
as it is increasingly done (e.g. Chen et al., 2010; Karnstedt et al.,
2010).
Acknowledgements
Thomas Voss made valuable comments on the original mas-
ter thesis and the paper. Three anonymous reviewers helped
547
to significantly improve the manuscript. The simulations were
written in Java and by employing the Repast Simphony Simu-
lation Software (http://repast.sourceforge.net/index.html). Google
Project Hosting ensures that the code is available under the GNU
General Public License: http://code.google.com/p/pg-network. For
data processing and visualising, I used the software environment
of R (http://www.r-project.org/) and the excellent ggplot package
(http://had.co.nz/ggplot/).
References
Anthony, D., 2005. Cooperation in microcredit borrowing groups: identity, sanctions,
and reciprocity in the production of collective goods. American Sociological
Review 70, 496–515.
Axelrod, R., 1984. The Evolution of Cooperation. Basic Books.
Bendor, J., Diermeier, D., Siegel, D.A., Ting, M.M., 2011. A Behavioral Theory of Elec-
tions. Princeton University Press.
Bendor, J., Diermeier, D., Ting, M.M., 2004, December. The Empirical Content of
Adaptive Models, http://papers.ssrn.com/sol3/papers.cfm?abstract id=647602
(accessed 31.03.12).
Chen, Y., Harper, F.M., Konstan, J., Li, S.X., 2010. Social comparisons and contribu-
tions to online communities: a field experiment on MovieLens. The American
Economic Review 100 (4), 1358–1398.
Coleman, J.S., 1990. Foundations of Social Theory. The Belknap Press of Harvard
University Press.
de Vos, H., Smaniotto, R., Elsas, D.A., 2001. Reciprocal altruism under conditions of
partner selection. Rationality and Society 13 (2), 139–183.
Eguíluz, V.M., Zimmermann, M.G., Cela-Conde, C.J., San Miguel, M., 2005. Coop-
eration and the emergence of role differentiation in the dynamics of social
networks. American Journal of Sociology 110 (4), 977–1008.
Ellickson, R.C., 1991. Order without Law: How Neighbors Settle Disputes. Harvard
University Press.
Elster, J., 1989. The Cement of Society: A Study of Social Order. Cambridge University
Press.
Fehl, K., van der Post, D.J., Semmann, D., 2011. Co-evolution of behaviour and social
network structure promotes human cooperation. Ecology Letters 14, 546–551.
Festinger, L., 1950. Informal social communication. Psychological Review 57,
271–282.
Festinger, L., 1954. A theory of social comparison processes. Human Relations 7 (2),
117–140.
Flache, A., 1996. The Double Edge of Networks. An Analysis of the Effect of Informal
Networks on Cooperation in Social Dilemmas. Thesis Publishers.
Fridman, N., Kaminka, G., 2010. Modeling pedestrian crowd behavior based on a
cognitive model of social comparison theory. Computational & Mathematical
Organization Theory 16, 348–372.
Fu, F., Hauert, C., Nowak, M.A., Wang, L., 2008. Reputation-based partner choice
promots cooperation in social networks. Physical Review E 78 (2), 026117.
Fudenberg, D., Levine, D.K., 1998. The Theory of Learning in Games. The MIT Press.
Gould, R.V., 1993a. Collective action and network structure. American Sociological
Review 58 (2), 182–196.
Gould, R.V., 1993b. Trade cohesion, class unity, and urban insurrection: artisanal
activism in the Paris Commune. American Journal of Sociology 98 (4), 721–754.
Gould, R.V., 2003. Why do networks matter? Rationalist and structuralist interpreta-
tions. In: Diani, M., McAdam, D. (Eds.), Social Movements and Networks. Oxford
University Press, pp. 233–257.
Granovetter, M., 2005. The impact of social structure on economic outcomes. The
Journal of Economic Perspectives 19 (1), 33–50.
Hanaki, N., Peterhansl, A., Dodds, P.S., Watts, D.J., 2007. Cooperation in evolving
social networks. Management Science 53 (7), 1036–1050.
Hardin, R., 1982. Collective Action. John Hopkins University Press, Baltimore; Lon-
don.
Hechter, M., 1988. Principles of Group Solidarity. University of California Press, Ltd.,
London, England.
Heckathorn, D.D., 1990. Collective sanctions and compliance norms: a formal theory
of group-mediated social control. American Sociological Review 55 (3), 366–384.
Homans, G.C., 1958. Social behavior as exchange. American Journal of Sociology 63
(6), 597–606.
Jackson, M.O., Wolinsky, A., 1996. A strategic model of social and economic networks.
Journal of Economic Theory 71, 44–74.
Karnstedt, M., Hennessy, T., Chan, J., Basuchowdhuri, P., Hayes, C., Strufe, T., 2010.
Churn in social network. In: Furht, B. (Ed.), Handbook of Social Network Tech-
nologies and Applications. Springer US, pp. 185–220.
Macy, M.W., 1990. Learning theory and the logic of critical mass. American Socio-
logical Review 55 (6), 809–826.
Macy, M.W., 1991. Learning to cooperate: stochastic and tacit collusion in social
exchange. American Journal of Sociology 97 (3), 808–843.
Macy, M.W., Flache, A., 2002. Learning dynamics in social dilemmas. Proceedings of
the National Academy of Sciences of the United States of America 99 (Suppl. 3),
7229.
McAdam, D., Paulsen, R., 1993. Specifying the relationship between social ties and
activism. American Journal of Sociology 99 (3), 640–667.
Newell, A., 1990. Unified Theories of Cognition. Harvard University Press.
548 J. Zschache / Social Networks 34 (2012) 539–548
Ohtsuki, H., Hauert, C., Lieberman, E., Nowak, M.A., 2006. A simple rule for the
evolution of cooperation on graphs. Nature 441, 502–505.
Oliver, P.E., 1980. Rewards and punishments as selective incentives for collec-
tive action: theoretical investigations. American Journal of Sociology 85 (6),
1356–1375.
Olson, M., 1971. The Logic of Collective Action. Public Goods and the Theory of
Groups. Harvard University Press.
Opp, K.-D., Gern, C., 1993. Dissident groups, personal networks, and sponta-
neous cooperation: The East German Revolution of 1989. American Sociological
Review 58, 659–680.
Orbell, J.M., Dawes, R.M., 1993. Social welfare, cooperators’ advantage, and the
option of not playing the game. American Sociological Review 58 (6), 787–800.
Rand, D.G., Arbesman, S., Christakis, N.A., 2011. Dynamic social networks
promote cooperation in experiments with humans. Proceedings of
the National Academy of Sciences of the United States of America,
http://dx.doi.org/10.1073/pnas.1108243108(Epub ahead of print; November
14, 2011).
Raub, W., Weesie, J., 1990. Reputation and efficiency in social interactions: an exam-
ple of network effects. American Journal of Sociology 96 (3), 626–654.
Roth, A.E., Erev, I., 1995. Learning in extensive-form games: experimental data
and simple dynamic models in the intermediate term. Games and Economic
Behaviour 8, 164–212.
Santos, F.C., Pacheco, J.M., Lenaerts, T., 2006. Cooperation prevails when indi-
viduals adjust their social ties. PLoS Computational Biology 2 (10), e140,
doi:10.1371/journal.pcbi.0020140.
Simon, H.A., 1955. A behavioral model of rational choice. The Quarterly Journal of
Economics 69, 99–118.
Skyrms, B., Pemantle, R., 2000. A dynamic model of social network formation. Pro-
ceedings of the National Academy of Sciences of the United States of America
97 (16), 9340.
Suri, S., Watts, D.J., 2010. Cooperation and contagion in networked public goods
experiments. CoRR abs/1008.1276.
Takács, K., Janky, B., 2007. Smiling contributions: social control in a public goods
game with network decline. Physica A: Statistical Mechanics and its Applications
378 (1), 76–82.
Takács, K., Janky, B., Flache, A., 2008. Collective action and network change. Social
Networks 30 (3), 177–189.
Taylor, M., 1987. The Possibility of Cooperation. Cambridge University Press.
Watts, D.J., 1999. Small Worlds: The Dynamics of Networks between Order and
Randomness. Princeton University Press.
Young, H.P., 1998. Individual Strategy and Social Structure. Princeton University
Press.
Young, H.P., 2004. Strategic Learning and its Limits. Oxford University Press.