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Gurus, Opinion Polls and Social Learning


  • Nicolas Melissas

    () (Centro de Investigacion Economica (CIE), Instituto Tecnologico Autonomo de Mexico (ITAM))


This paper analyzes cheap talk in an investment model with information externalities. In contrast to Gossner and Melissas (2006), I allow for (i) competition effects, (ii) positive network externalities and (iii) more than one interviewed player. In the presence of competition effects, a player will never truthfully reveal her information about the realized state of the world. In the presence of positive network externalities, however, there exists a parameter range where, under mild additional conditions, the unique equilibrium is the separating one. Finally, using numerical computations, I show that for a sufficiently large number of interviewed players there exists a separating equilibrium in my entire parameter range.

Suggested Citation

  • Nicolas Melissas, 2007. "Gurus, Opinion Polls and Social Learning," Working Papers 0703, Centro de Investigacion Economica, ITAM.
  • Handle: RePEc:cie:wpaper:0703

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    More about this item


    Cheap Talk; Information Externality; Social Learning; Herd Behaviour;

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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