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Computing agents' reputation within a network

Author

Listed:
  • Grigis, Federico
  • Ortobelli Lozza, Sergio
  • Vitali, Sebastiano

Abstract

We propose a model of information transmission and reputation building within a social network that exploits portfolio theory and option structures. The network aims to estimate an unknown parameter through multiple communication rounds. At every communication round, estimates of different agents' abilities are shared, avoiding the repetition of information. These estimates are interpreted as financial assets driven by a compound Poisson process. After every communication round, agents construct a fictitious portfolio of options whose underlying is the vector of shared estimates. The portfolio's weights are exploited to aggregate the information received in the communication round. Sufficient conditions for reaching consensus or polarization are provided.

Suggested Citation

  • Grigis, Federico & Ortobelli Lozza, Sergio & Vitali, Sebastiano, 2025. "Computing agents' reputation within a network," Games and Economic Behavior, Elsevier, vol. 150(C), pages 312-333.
    • Handle: RePEc:eee:gamebe:v:150:y:2025:i:c:p:312-333
    DOI: 10.1016/j.geb.2025.01.002
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    References listed on IDEAS

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    More about this item

    Keywords

    Social networks; Learning; Social influence; Option structures; Portfolio optimization;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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