Strategic communication networks
Abstract
We consider situations in which individuals would like to choose an action which is close to that of others, as well as close to a state of nature, with the ideal proximity to the state varying across agents. Before this coordination game is played, a cheap-talk communication stage is offered to the indivisuals who decide to whom they reveal their private information about the state. The information transmission occurring in the communication stage is characterized by a strategic communication network. We provide an explicit link between players' preferences and the equilibrium strategic communication networks. A key feature of our equilibrium characterization is that whether communication takes place between two agents not only depends on the conflict of interest between these agents, but also on the number and preferences of the other agents with whom they communicate. Apart from some specific cases, the equilibrium communication networks are quite complex despite our simple one-dimensional description of preference heterogeneity. In general, strategic communication networks cannot be completely Pareto-ranked, but expected social welfare always increases as the communication network expands.Download Info
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Paper provided by Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne in its series Documents de travail du Centre d'Economie de la Sorbonne with number 09005.Length: 33 pages
Date of creation: Feb 2009
Date of revision:
Handle: RePEc:mse:cesdoc:09005
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Related research
Keywords: Cheap talk; coordination; incomplete information; networks.;Other versions of this item:
- Jeanne Hagenbach & Frédéric Koessler, 2008. "Strategic communication networks," PSE Working Papers halshs-00586847, HAL.
- Jeanne Hagenbach & Frédéric Koessler, 2009. "Strategic Communication Networks," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00367692, HAL.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-23 (All new papers)
- NEP-CSE-2009-05-23 (Economics of Strategic Management)
- NEP-CTA-2009-05-23 (Contract Theory & Applications)
- NEP-GTH-2009-05-23 (Game Theory)
- NEP-NET-2009-05-23 (Network Economics)
- NEP-SOC-2009-05-23 (Social Norms & Social Capital)
References
References listed on IDEASPlease report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Okuno-Fujiwara, Masahiro & Postlewaite, Andrew & Suzumura, Kotaro, 1990. "Strategic Information Revelation," Review of Economic Studies, Wiley Blackwell, vol. 57(1), pages 25-47, January.
- Van Zandt, Timothy & Vives, Xavier, 2007.
"Monotone equilibria in Bayesian games of strategic complementarities,"
Journal of Economic Theory,
Elsevier, vol. 134(1), pages 339-360, May.
- Van Zandt, Timothy & Vives, Xavier, 2003. "Monotone Equilibria in Bayesian Games of Strategic Complementarities," CEPR Discussion Papers 4103, C.E.P.R. Discussion Papers.
- Antoni Calvó-Armengol & Joan de Martí, 2007. "Communication Networks: Knowledge and Decisions," American Economic Review, American Economic Association, vol. 97(2), pages 86-91, May.
Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Maria Goltsman & Gregory Pavlov, 2008.
"How to Talk to Multiple Audiences,"
UWO Department of Economics Working Papers
20081, University of Western Ontario, Department of Economics.
- Goltsman, Maria & Pavlov, Gregory, 2011. "How to talk to multiple audiences," Games and Economic Behavior, Elsevier, vol. 72(1), pages 100-122, May.
- Daron Acemoglu & Kostas Bimpikis & Asuman E, Ozdaglar, 2010.
"Dynamics of Information Exchange in Endogenous Social Networks,"
Levine's Working Paper Archive
661465000000000216, David K. Levine.
- Bimpikis, Kostas & Ozdaglar, Asuman & Acemoglu, Daron, 0. "Dynamics of information exchange in endogenous social networks," Theoretical Economics, Econometric Society.
- Daron Acemoglu & Kostas Bimpikis & Asuman Ozdaglar, 2010. "Dynamics of Information Exchange in Endogenous Social Networks," NBER Working Papers 16410, National Bureau of Economic Research, Inc.
- Daron Acemoglu & Asuman E. Ozdaglar, 2010.
"Opinion Dynamics and Learning in Social Networks,"
Levine's Working Paper Archive
661465000000000222, David K. Levine.
- Daron Acemoglu & Asuman Ozdaglar, 2011. "Opinion Dynamics and Learning in Social Networks," Dynamic Games and Applications, Springer, vol. 1(1), pages 3-49, March.
- Choi, Syngjoo & Lee, Jihong, 2009. "Communication, Coordination and Networks," MPRA Paper 19055, University Library of Munich, Germany.
- Salvatore Piccolo & Emanuele Tarantino, 2011. "Managerial Compensations and Information Sharing under Moral Hazard: Is Transparency Good?," CSEF Working Papers 294, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
- Acemoglu, Daron & Ozdaglar, Asuman & ParandehGheibi, Ali, 2010. "Spread of (mis)information in social networks," Games and Economic Behavior, Elsevier, vol. 70(2), pages 194-227, November.
- repec:spr:inrvec:v:1:y:2011:i:1:p:3-49 is not listed on IDEAS
- Jeanne Hagenbach & Frédéric Koessler, 2011. "Full Disclosure in Decentralized Organizations," PSE Working Papers halshs-00652279, HAL.
- Andrea Galeotti & Christian Ghiglino & Francesco Squintani, 2009. "Strategic Information Transmission in Networks," Economics Discussion Papers 668, University of Essex, Department of Economics.
- Salvatore Piccolo, 2011. "Communicating Vertical Hierarchies: the Adverse Selection Case," CSEF Working Papers 273, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
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