The Structure of Information Networks
We develop a model of information acquisition in a network where agents pay for all the information they acquire including those through indirect links. The cost of information depends on the value of information itself and the distance it traverses in the network. We find that when the costs of information increase with distance, the complete network is the only Nash network. When costs of information decrease with distance capturing delay, all equilibrium information networks are minimally connected, though not all trees are Nash. We analyze the popular star and chain networks and identify strict Nash networks. We show that there is almost no divergence between efficient and equilibrium information networks. We explore the implications of a spatial model and information decay and discuss the relationship with experimental evidence.
(This abstract was borrowed from another version of this item.)
|Date of creation:|
|Date of revision:|
|Contact details of provider:|| Postal: Baton Rouge, LA 70803-6306|
Web page: http://www.business.lsu.edu/economics
More information through EDIRC
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.:
- Matthew O. Jackson & Asher Wolinsky, 1994.
"A Strategic Model of Social and Economic Networks,"
1098, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Rajgopal Kannan & Lydia Ray & Sudipta Sarangi, 2007.
"The structure of information networks,"
Springer;Society for the Advancement of Economic Theory (SAET), vol. 30(1), pages 119-134, January.
- Sudipta Sarangi & R. Kannan & L. Ray, . "The Structure of Information Networks," Departmental Working Papers 2003-01, Department of Economics, Louisiana State University.
- Sudipta Sarangi & Rajgopal Kannan & Lydia Ray, . "The Structure of Information Networks," Departmental Working Papers 2004-05, Department of Economics, Louisiana State University.
- Sarangi, Sudipta & Raj Kannan & Lydia Ray, 2003. "The Structure of Information Networks," Royal Economic Society Annual Conference 2003 182, Royal Economic Society.
- Sudipta Sarangi & H. Haller, .
"Nash Networks with Heterogeneous Agents,"
Departmental Working Papers
2003-06, Department of Economics, Louisiana State University.
- Cary Deck & Cathleen Johnson, 2004. "Link bidding in laboratory networks," Review of Economic Design, Springer;Society for Economic Design, vol. 8(4), pages 359-372, 04.
- Michael Kosfeld, . "Network Experiments," IEW - Working Papers 152, Institute for Empirical Research in Economics - University of Zurich.
- Watts, Alison, 2001. "A Dynamic Model of Network Formation," Games and Economic Behavior, Elsevier, vol. 34(2), pages 331-341, February.
- Venkatesh Bala & Sanjeev Goyal, 2000. "A Noncooperative Model of Network Formation," Econometrica, Econometric Society, vol. 68(5), pages 1181-1230, September.
- Matthew O. Jackson, 2003.
"A survey of models of network formation: Stability and efficiency,"
1161, California Institute of Technology, Division of the Humanities and Social Sciences.
- Matthew O. Jackson, 2003. "A Survey of Models of Network Formation: Stability and Efficiency," Game Theory and Information 0303011, EconWPA.
- Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-48, June.
- Galeotti, Andrea & Goyal, Sanjeev & Kamphorst, Jurjen, 2006.
"Network formation with heterogeneous players,"
Games and Economic Behavior,
Elsevier, vol. 54(2), pages 353-372, February.
When requesting a correction, please mention this item's handle: RePEc:lsu:lsuwpp:2004-05. 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: ()
If references are entirely missing, you can add them using this form.