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Credibility and Strategic Learning in Networks

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  • 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

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    Cited by:

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    3. Tsakas, Nikolas, 2017. "Diffusion by imitation: The importance of targeting agents," Journal of Economic Behavior & Organization, Elsevier, vol. 139(C), pages 118-151.
    4. Bravard, Christophe & Durieu, Jacques & Sarangi, Sudipta & Sémirat, Stéphan, 2023. "False information from near and far," Games and Economic Behavior, Elsevier, vol. 137(C), pages 152-174.
    5. Nikolas Tsakas, 2014. "Optimal influence under observational learning," Gecomplexity Discussion Paper Series 4, Action IS1104 "The EU in the new complex geography of economic systems: models, tools and policy evaluation", revised Nov 2014.

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