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Credibility and Strategic Learning in Networks

Author

Listed:
  • Chatterjee, Kalyan

    (Department of Economics, The Pennsylvania State University)

  • Dutta, Bhaskar

    (Department of Economics,University of Warwick)

Abstract

This paper studies a model of diffusion in a fixed, finite connected network. There is an interested party that knows the quality of the product or idea being propagated and chooses an implant in the network to influence other agents to buy or adopt. Agents are either “innovators”, who adopt immediately, or rational. Rational consumers buy if buying rather than waiting maximizes expected utility. We consider the conditions on the network under which efficient diffusion of the good product with probability one is a perfect Bayes equilibrium. Centrality measures and the structure of the entire network are both important. We also discuss various inefficient equilibria.

Suggested Citation

  • Chatterjee, Kalyan & Dutta, Bhaskar, 2011. "Credibility and Strategic Learning in Networks," The Warwick Economics Research Paper Series (TWERPS) 972, University of Warwick, Department of Economics.
    • Handle: RePEc:wrk:warwec:972
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    References listed on IDEAS

    as
    1. Ellison, Glenn, 1993. "Learning, Local Interaction, and Coordination," Econometrica, Econometric Society, vol. 61(5), pages 1047-1071, September.
    2. Venkatesh Bala & Sanjeev Goyal, 1998. "Learning from Neighbours," Review of Economic Studies, Oxford University Press, vol. 65(3), pages 595-621.
    3. Timothy G. Conley & Christopher R. Udry, 2010. "Learning about a New Technology: Pineapple in Ghana," American Economic Review, American Economic Association, vol. 100(1), pages 35-69, March.
    4. Andrea Galeotti & Sanjeev Goyal, 2009. "Influencing the influencers: a theory of strategic diffusion," RAND Journal of Economics, RAND Corporation, vol. 40(3), pages 509-532, September.
    5. Munshi, Kaivan, 2004. "Social learning in a heterogeneous population: technology diffusion in the Indian Green Revolution," Journal of Development Economics, Elsevier, vol. 73(1), pages 185-213, February.
    6. Goyal, Sanjeev & Galeotti, Andrea, 2007. "A Theory of Strategic Diffusion," Coalition Theory Network Working Papers 9096, Fondazione Eni Enrico Mattei (FEEM).
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    Cited by:

    1. Michel Grabisch & Agnieszka Rusinowska, 2020. "A Survey on Nonstrategic Models of Opinion Dynamics," Games, MDPI, Open Access Journal, vol. 11(4), pages 1-29, December.
    2. Tsakas, Nikolas, 2017. "Diffusion by imitation: The importance of targeting agents," Journal of Economic Behavior & Organization, Elsevier, vol. 139(C), pages 118-151.
    3. Erbao Cao & He Li, 2020. "Group buying and consumer referral on a social network," Electronic Commerce Research, Springer, vol. 20(1), pages 21-52, March.
    4. Kimberley Ann Scharf, 2013. "Private Provision of Public Goods and Information Diffusion in Social Groups," CESifo Working Paper Series 4492, CESifo.

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