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Targeted vs. collective information sharing in networks


Kushnir, Alexey; Nichifor, Alexandru (2014). Targeted vs. collective information sharing in networks. Working paper series / Department of Economics 152, University of Zurich.

Abstract

We introduce a simple two-stage game of endogenous network formation and information sharing for reasoning about the optimal design of social networks like Facebook or Google+. We distinguish between unilateral and bilateral connections and between targeted and collective information sharing. Agents value being connected to other agents and sharing and receiving information. We consider multiple utility specifications. We show that the game always has an equilibrium in pure strategies and then we study how the network design and the utility specifications affect welfare. Surprisingly, we find that in general, targeted information sharing is not necessarily better than collective information sharing. However, if all agents are either "babblers" or "friends", irrespective of whether the network is unilateral or bilateral, in equilibrium, targeted information sharing yields higher welfare than collective information sharing.

Abstract

We introduce a simple two-stage game of endogenous network formation and information sharing for reasoning about the optimal design of social networks like Facebook or Google+. We distinguish between unilateral and bilateral connections and between targeted and collective information sharing. Agents value being connected to other agents and sharing and receiving information. We consider multiple utility specifications. We show that the game always has an equilibrium in pure strategies and then we study how the network design and the utility specifications affect welfare. Surprisingly, we find that in general, targeted information sharing is not necessarily better than collective information sharing. However, if all agents are either "babblers" or "friends", irrespective of whether the network is unilateral or bilateral, in equilibrium, targeted information sharing yields higher welfare than collective information sharing.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:D47, D85, C72, C62
Uncontrolled Keywords:Networks, network formation, unilateral connections, bilateral connections, targeted information sharing, collective information sharing, Google, Facebook, babblers, friends
Language:English
Date:April 2014
Deposited On:08 Apr 2014 15:36
Last Modified:15 Aug 2017 08:47
Series Name:Working paper series / Department of Economics
Number of Pages:25
ISSN:1664-7041
Official URL:http://www.econ.uzh.ch/static/wp/econwp152.pdf
Related URLs:http://www.econ.uzh.ch/static/workingpapers.php

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