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Information Acquisition and Exchange in Social Networks

Author

Listed:
  • Sanjeev Goyal
  • Stephanie Rosenkranz
  • Utz Weitzel
  • Vincent Buskens

Abstract

A central feature of social networks is information sharing. The Internet and related computing technologies define the relative costs of private information acquisition and forming links with others. This paper presents an experiment on the effects of changing costs.We find that a decline in relative costs of linking makes private investments more dispersed and gives rise to denser social networks. Aggregate investment falls, but individuals access to investment remains stable, due to increased networking. The overall effect is a significant increase in individual utility and aggregate welfare.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Sanjeev Goyal & Stephanie Rosenkranz & Utz Weitzel & Vincent Buskens, 2017. "Information Acquisition and Exchange in Social Networks," Economic Journal, Royal Economic Society, vol. 127(606), pages 2302-2331, November.
    • Handle: RePEc:wly:econjl:v:127:y:2017:i:606:p:2302-2331
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    File URL: http://hdl.handle.net/10.1111/ecoj.2017.127.issue-606
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    Cited by:

    1. Chen, Ying & Lane, Tom & McDonald, Stuart, 2025. "Endogenous network formation in local public goods: An experimental analysis," Games and Economic Behavior, Elsevier, vol. 150(C), pages 198-214.
    2. Rezaei, Sarah & Rosenkranz, Stephanie & Weitzel, Utz & Westbrock, Bastian, 2024. "Social preferences on networks," Journal of Public Economics, Elsevier, vol. 234(C).
    3. Syngjoo Choi & Sanjeev Goyal & Frédéric Moisan, 2022. "Connectors and Influencers," Working Papers 20220077, New York University Abu Dhabi, Department of Social Science, revised Jun 2022.
    4. 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.
    5. Dong, Lu & Huang, Lingbo & Lien, Jaimie W. & Zheng, Jie, 2024. "How alliances form and conflict ensues," Games and Economic Behavior, Elsevier, vol. 146(C), pages 255-276.
    6. Liu, Jia & Sonntag, Axel & Zizzo, Daniel John, 2022. "Information defaults in repeated public good provision," Journal of Economic Behavior & Organization, Elsevier, vol. 197(C), pages 356-369.
    7. Jakob Grazzini & Domenico Massaro, 2021. "Dispersed information, social networks, and aggregate behavior," Economic Inquiry, Western Economic Association International, vol. 59(3), pages 1129-1148, July.
    8. Myatt, David P. & Wallace, Chris, 2019. "Information acquisition and use by networked players," Journal of Economic Theory, Elsevier, vol. 182(C), pages 360-401.
    9. Choi, S. & Goyal, S. & Moisan, F., 2020. "Brokerage Rents and Intermediation Networks," Cambridge Working Papers in Economics 2005, Faculty of Economics, University of Cambridge.
    10. He, Simin & Zou, Xinlu, 2024. "Public goods provision in a network formation game," Journal of Economic Behavior & Organization, Elsevier, vol. 218(C), pages 104-131.
    11. repec:osf:socarx:y4mkd_v1 is not listed on IDEAS
    12. Christoph Aymanns & Jakob Foerster & Co-Pierre Georg & Matthias Weber, 2017. "Fake News in Social Networks," Papers 1708.06233, arXiv.org, revised Oct 2025.

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