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The Effects of Information and Interactions on Contagion Processes

Author

Listed:
  • Simon Angus

    (School of Economics, Monash University)

  • Virginie Masson

    (School of Economics, University of Adelaide)

Abstract

The network literature commonly neglects the importance of a clear distinction between interactions and information exchanges. Although convenient, this oversight is not innocuous and may lead to erroneous conclusions when looking at mechanisms such as contagion processes. We use simulation methods and conduct a systematic analysis of the implications of such omission. We show that the lack of distinction between information and interaction structures is not without consequences. More precisely, when agents use a myopic best response, only information exchanges matter and interactions can be ignored. With imitation however, both information and interactions play important yet different roles in contagion.

Suggested Citation

  • Simon Angus & Virginie Masson, 2010. "The Effects of Information and Interactions on Contagion Processes," School of Economics and Public Policy Working Papers 2010-12, University of Adelaide, School of Economics and Public Policy.
    • Handle: RePEc:adl:wpaper:2010-12
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    File URL: https://media.adelaide.edu.au/economics/papers/doc/wp2010-12.pdf
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    References listed on IDEAS

    as
    1. Dunia López-Pintado, 2006. "Contagion and coordination in random networks," International Journal of Game Theory, Springer;Game Theory Society, vol. 34(3), pages 371-381, October.
    2. Alós-Ferrer, Carlos & Weidenholzer, Simon, 2008. "Contagion and efficiency," Journal of Economic Theory, Elsevier, vol. 143(1), pages 251-274, November.
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    Cited by:

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    3. Cui, Zhiwei & Wang, Rui, 2016. "Collaboration in networks with randomly chosen agents," Journal of Economic Behavior & Organization, Elsevier, vol. 129(C), pages 129-141.

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    Keywords

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    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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