Strategic Information Acquisition in Networked Groups with “Informational Spillovers”
This paper develops a model of costly information acquisition by agents who are connected through a network. For a exogenously given network, each agent decides first on information acquisition from his neighbors and then, after processing the information acquired, takes an action. Each agent is concerned about the extent to which other agents align their actions with the underlying state. A new equilibrium notion, which is in the spirit of perfect Bayesian equilibrium, is proposed to analyze information acquisition decisions within networked groups. This equilibrium notion allows each agent to compute, when deciding about information acquisition, the extent to which changes in his information acquisition decision will affect his own perception of future expected payoffs. Agents anticipate and incorporate such changes in their information acquisition decisions. Both the efficient and the equilibrium information acquisition profiles are characterized and the compatibility between them is related to the density of the network.
|Date of creation:||Dec 2009|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 01 800 021 2433
Web page: http://www.cide.edu/divisiones-academicas/economia/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Chwe, Michael Suk-Young, 2000. "Communication and Coordination in Social Networks," Review of Economic Studies, Wiley Blackwell, vol. 67(1), pages 1-16, January.
- Rothschild, Michael & Stiglitz, Joseph E, 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," The Quarterly Journal of Economics, MIT Press, vol. 90(4), pages 630-49, November.
- Allen, Beth, 1986. "The Demand for (Differentiated) Information," Review of Economic Studies, Wiley Blackwell, vol. 53(3), pages 311-23, July.
- Spence, A Michael, 1973. "Job Market Signaling," The Quarterly Journal of Economics, MIT Press, vol. 87(3), pages 355-74, August.
- Bloch, Francis & Dutta, Bhaskar, 2005.
"Communication Networks with Endogenous Link Strength,"
The Warwick Economics Research Paper Series (TWERPS)
723, University of Warwick, Department of Economics.
- Bloch, Francis & Dutta, Bhaskar, 2009. "Communication networks with endogenous link strength," Games and Economic Behavior, Elsevier, vol. 66(1), pages 39-56, May.
- Francis Bloch & Bhaskar Dutta, 2008. "Communication networks with endogeneous link strength," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 08-15, Indian Statistical Institute, New Delhi, India.
- Antoni Calvó-Armengol & Matthew O. Jackson, 2003.
"Networks in Labor Markets: Wage and Employment Dynamics and Inequality,"
55, Barcelona Graduate School of Economics.
- Calvo-Armengol, Antoni & Jackson, Matthew O., 2007. "Networks in labor markets: Wage and employment dynamics and inequality," Journal of Economic Theory, Elsevier, vol. 132(1), pages 27-46, January.
- Archishman Chakraborty & Rick Harbaugh, 2004.
"Comparative Cheap Talk,"
2004-08, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
- Gilat Levy & Ronny Razin, 2007. "On the Limits of Communication in Multidimensional Cheap Talk: A Comment," Econometrica, Econometric Society, vol. 75(3), pages 885-893, 05.
When requesting a correction, please mention this item's handle: RePEc:emc:wpaper:dte470. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Daniel Ventosa-Santaulària)
If references are entirely missing, you can add them using this form.