| Summary: | Individual acts of cooperation give rise to dynamic social networks. Traditionally, models for cooperation in structured populations are based on a separation of individual strategies and of population structure. Individuals adopt a strategy-typically cooperation or defection, which determines their behaviour toward their neighbours as defined by an interaction network. Here, we report a behavioural experiment that amalgamates strategies and structure to empirically investigate the dynamics of social networks. The action of paying a cost c to provide a benefit b is represented as a directed link point from the donor to the recipient. Participants can add and/or remove links to up to two recipients in each round. First, we show that dense networks emerge, where individuals are characterized by fairness: they receive to the same extent they provide. More specifically, we investigate how participants use information about the generosity and payoff of others to update their links. It turns out that aversion to payoff inequity was the most consistent update rule: adding links to individuals that are worse off and removing links to individuals that are better off. We then investigate the effect of direct reciprocation, showing that the possibility of direct reciprocation does not increase cooperation as compared to the treatment where participants are totally unaware of who is providing benefits to them.
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