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Information Acquisition and Exchange in Social Networks

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  • 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.
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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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    References listed on IDEAS

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    Cited by:

    1. Myatt, David P. & Wallace, Chris, 2019. "Information acquisition and use by networked players," Journal of Economic Theory, Elsevier, vol. 182(C), pages 360-401.
    2. Choi, S & Goyal, S. & Moisan, F., 2019. "Connectors and Influencers," Cambridge Working Papers in Economics 1935, Faculty of Economics, University of Cambridge.

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