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Communication and influence

Author

Listed:
  • Prat, Andrea

    () (Columbia Business School and Department of Economics, Columbia University)

  • de Martí, Joan

    () (Departament d'Economia i Empresa, Universitat Pompeu Fabra and Barcelona GSE)

  • Calvó-Armengol, Antoni

    () (ICREA, Universitat Autònoma de Barcelona and Barcelona GSE)

Abstract

We study the information flows that arise among a set of agents with local knowledge and directed payoff interactions, which differ among pairs of agents. First, we study the equilibrium of a game where, before making decisions, agents can invest in pairwise active communication (speaking) and pairwise passive communication (listening). This leads to a full characterization of information and influence flows. Second, we show that, when the coordination motive dominates the adaptation motive, the influence of an agent on all his peers is approximately proportional to his eigenvector centrality. Third, we use our results to explain organizational phenomena such as: the emergence of work cliques; the adoption of human resources practices that foster communication (especially active communication); and the discrepancy between formal hierarchy and actual influence.

Suggested Citation

  • Prat, Andrea & de Martí, Joan & Calvó-Armengol, Antoni, 2015. "Communication and influence," Theoretical Economics, Econometric Society, vol. 10(2), May.
  • Handle: RePEc:the:publsh:1468
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Bergemann, Dirk & Morris, Stephen, 2017. "Belief-free rationalizability and informational robustness," Games and Economic Behavior, Elsevier, vol. 104(C), pages 744-759.
    2. Jackson, Matthew O. & Zenou, Yves, 2015. "Games on Networks," Handbook of Game Theory with Economic Applications, Elsevier.
    3. Hagenbach, Jeanne & Koessler, Frédéric, 2016. "Full disclosure in decentralized organizations," Economics Letters, Elsevier, vol. 139(C), pages 5-7.
    4. UI, Takashi, 2015. "Bayesian Nash Equilibrium and Variational Inequalities," Discussion Papers 2015-08, Graduate School of Economics, Hitotsubashi University.
    5. Jeanne Hagenbach & Frédéric Koessler & Eduardo Perez‐Richet, 2014. "Certifiable Pre‐Play Communication: Full Disclosure," Econometrica, Econometric Society, vol. 82(3), pages 1093-1131, May.
    6. de Martí, Joan & Zenou, Yves, 2015. "Network games with incomplete information," Journal of Mathematical Economics, Elsevier, vol. 61(C), pages 221-240.
    7. Ui, Takashi, 2016. "Bayesian Nash equilibrium and variational inequalities," Journal of Mathematical Economics, Elsevier, vol. 63(C), pages 139-146.
    8. Johanna Hertel & John Smith, 2013. "Not so cheap talk: costly and discrete communication," Theory and Decision, Springer, vol. 75(2), pages 267-291, August.
    9. Bernard Herskovic & Joao Ramos, 2016. "Acquiring information through peers," 2016 Meeting Papers 248, Society for Economic Dynamics.
    10. Garicano, Luis & Prat, Andrea, 2011. "Organizational Economics with Cognitive Costs," CEPR Discussion Papers 8372, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    Team theory; organizations; communication; invariant method;

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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