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Acquiring Information through Peers

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  • Bernard Herskovic
  • João Ramos

Abstract

We develop an endogenous network formation model, in which agents form connections to acquire information. Our model features complementarity in actions as agents care not only about accuracy of their decision-making but also about the actions of other agents. In equilibrium, the information structure is a hierarchical network, and, under weakly convex cost of forming links, the equilibrium network is core-periphery. Although agents are ex ante identical, there is ex post heterogeneity in payoffs and actions.

Suggested Citation

  • Bernard Herskovic & João Ramos, 2020. "Acquiring Information through Peers," American Economic Review, American Economic Association, vol. 110(7), pages 2128-2152, July.
  • Handle: RePEc:aea:aecrev:v:110:y:2020:i:7:p:2128-52
    DOI: 10.1257/aer.20181798
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    Cited by:

    1. Benjamin Golub & Stephen Morris, 2020. "Expectations, Networks, and Conventions," Papers 2009.13802, arXiv.org.
    2. Myatt, David P. & Wallace, Chris, 2019. "Information acquisition and use by networked players," Journal of Economic Theory, Elsevier, vol. 182(C), pages 360-401.
    3. Sergio Currarini & Francesco Feri & Bjoern Hartig & Miguel A. Meléndez-Jiménez, "undated". "To Share or Not to Share: An Experiment on Information Transmission in Networks," Discussion Papers in Economics 20/08, Division of Economics, School of Business, University of Leicester.
    4. Bernard Herskovic & Bryan Kelly & Hanno Lustig & Stijn Van Nieuwerburgh, 2020. "Firm Volatility in Granular Networks," Journal of Political Economy, University of Chicago Press, vol. 128(11), pages 4097-4162.
    5. Evan Sadler & Benjamin Golub, 2021. "Games on Endogenous Networks," Papers 2102.01587, arXiv.org, revised Feb 2024.
    6. Dessein, Wouter & Santos, Tano, 2019. "Managerial Style and Attention," CEPR Discussion Papers 13527, C.E.P.R. Discussion Papers.
    7. Meng, Delong, 2021. "Learning from like-minded people," Games and Economic Behavior, Elsevier, vol. 126(C), pages 231-250.
    8. Kinateder, Markus & Merlino, Luca Paolo, 2023. "Free riding in networks," European Economic Review, Elsevier, vol. 152(C).
    9. Nora, Vladyslav & Winter, Eyal, 2024. "Exploiting social influence in networks," Theoretical Economics, Econometric Society, vol. 19(1), January.
    10. Allouch, Nizar & King, Maia, 2021. "Welfare targeting in networks," Journal of Mathematical Economics, Elsevier, vol. 96(C).
    11. Choi, S & Goyal, S. & Moisan, F., 2019. "Connectors and Influencers," Cambridge Working Papers in Economics 1935, Faculty of Economics, University of Cambridge.
    12. Toman Barsbai & Victoria Licuanan & Andreas Steinmayr & Erwin Tiongson & Dean Yang, 2021. "Information and Immigrant Settlement," Working Papers 2021-30, Faculty of Economics and Statistics, Universität Innsbruck.
    13. Choi, S. & Goyal, G. & Moisan, F., 2020. "Large Scale Experiments on Networks: A New Platform with Applications," Cambridge Working Papers in Economics 2063, Faculty of Economics, University of Cambridge.

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    More about this item

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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