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Influential Opinion Leaders

  • Jakub Steiner
  • Colin Stewart

We present a two-stage coordination game in which early choices of experts with special interests are observed by followers who move in the second stage. We show that the equilibrium outcome is biased toward the experts' interests even though followers know the distribution of expert interests and account for it when evaluating observed experts' actions. Expert influence is fully decentralized in the sense that each individual expert has a negligible impact. The bias in favor of experts results from a social learning effect that is multiplied through a coordination motive. We show that the total effect can be large even if the direct social learning effect is small. We apply our results to the diffusion of products with network externalities and the onset of social movements.

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Paper provided by The Center for Economic Research and Graduate Education - Economics Institute, Prague in its series CERGE-EI Working Papers with number wp458.

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Date of creation: Oct 2012
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Handle: RePEc:cer:papers:wp458
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  1. Stephen Coate, 2004. "Pareto-Improving Campaign Finance Policy," American Economic Review, American Economic Association, vol. 94(3), pages 628-655, June.
  2. Nicholas Economides, 2007. "Patents and Antitrust: Application to Adjacent Markets," Working Papers 07-24, New York University, Leonard N. Stern School of Business, Department of Economics.
  3. Forsythe, R. & Myerson, R. & Rietz, T. & Weber, R., 1991. "An Experiment on Coordination in Multi-Candidate Elections: The Importance of Polls and Election Histories," Working Papers 91-31, University of Iowa, Department of Economics.
  4. Dasgupta, Amil, 2007. "Coordination and delay in global games," Journal of Economic Theory, Elsevier, vol. 134(1), pages 195-225, May.
  5. Steiner, Jakub, 2008. "Coordination of mobile labor," Journal of Economic Theory, Elsevier, vol. 139(1), pages 25-46, March.
  6. Stephen Morris & Bernardo Guimaraes, 2004. "Risk and Wealth in a Model of Self-Fulfilling Currency Attacks," Yale School of Management Working Papers ysm424, Yale School of Management.
  7. George-Marios Angeletos & Alessandro Pavan, 2007. "Dynamic Global Games of Regime Change: Learning, Multiplicity and Timing of Attacks," Discussion Papers 1497, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  8. Duncan J. Watts & Peter Sheridan Dodds, 2007. "Influentials, Networks, and Public Opinion Formation," Journal of Consumer Research, Oxford University Press, vol. 34(4), pages 441-458, 05.
  9. Stefano DellaVigna & Ethan Kaplan, 2007. "The Fox News Effect: Media Bias and Voting," The Quarterly Journal of Economics, Oxford University Press, vol. 122(3), pages 1187-1234.
  10. Giancarlo Corsetti & Amil Dasgupta & Stephen Morris & Hyun Song Shin, 2004. "Does One Soros Make a Difference? A Theory of Currency Crises with Large and Small Traders," Review of Economic Studies, Oxford University Press, vol. 71(1), pages 87-113.
  11. Mehmet Ekmekci, 2008. "Manipulation through political endorsements," Discussion Papers 1509, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  12. Chris Edmond, 2011. "Information Manipulation, Coordination, and Regime Change," Department of Economics - Working Papers Series 1125, The University of Melbourne.
  13. Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-40, June.
  14. David P. Myatt, 2004. "On the Theory of Strategic Voting," Economics Series Working Papers 186, University of Oxford, Department of Economics.
  15. repec:oup:restud:v:74:y:2007:i:3:p:653-684 is not listed on IDEAS
  16. Barry Nalebuff & Ron Shachar, 1999. "Follow the Leader: Theory and Evidence on Political Participation," American Economic Review, American Economic Association, vol. 89(3), pages 525-547, June.
  17. Katz, Michael L & Shapiro, Carl, 1986. "Technology Adoption in the Presence of Network Externalities," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 822-41, August.
  18. repec:oup:restud:v:74:y:2007:i:1:p:255-281 is not listed on IDEAS
  19. Kevin Murphy & Andrei Shleifer, 2004. "Persuasion in Politics," NBER Working Papers 10248, National Bureau of Economic Research, Inc.
  20. George-Marios Angeletos & Christian Hellwig & Alessandro Pavan, 2007. "Dynamic Global Games of Regime Change: Learning, Multiplicity, and the Timing of Attacks," Econometrica, Econometric Society, vol. 75(3), pages 711-756, 05.
  21. Jakub Steiner, 2006. "Coordination in a Mobile World," CERGE-EI Working Papers wp295, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
  22. Gene M. Grossman & Elhanan Helpman, 2002. "Special Interest Politics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262571676, June.
  23. Callander, Steven, 2008. "Majority rule when voters like to win," Games and Economic Behavior, Elsevier, vol. 64(2), pages 393-420, November.
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