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Centralizing Information in Networks

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  • Jeanne Hagenbach

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

In the dynamic game we consider, players are the members of a fixed network. Everyone is initially endowed with an information item that he is the only paper to hold. Players are offered a finite number of periods to centralize the initially dispersed items in the hands of any one member of the network. In every period, each agent strategically chooses whether or not to transmit the items he holds to this neighbors in the network. The sooner all the items are gathered by any individual, the better it is for the group of players as a whole. Besides, the agent who first centralizes all the items is offered an additional reward that he keeps for himself. In this framework where information transmission is strategic and physically restricted, we provide a necessary and sufficient condition for a group to pool information items in every equilibrium. This condition is independent of the network structure. The architecture of links however affects the time needed before items are centralized in equilibrium. This paper provides theoretical support to Bonacich (1990)'s experimental results.

Suggested Citation

  • Jeanne Hagenbach, 2009. "Centralizing Information in Networks," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00367894, HAL.
    • Handle: RePEc:hal:cesptp:halshs-00367894
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00367894
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    References listed on IDEAS

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    1. Patrick Bolton & Mathias Dewatripont, 1994. "The Firm as a Communication Network," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(4), pages 809-839.
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    3. Jackson, Matthew O. & Wolinsky, Asher, 1996. "A Strategic Model of Social and Economic Networks," Journal of Economic Theory, Elsevier, vol. 71(1), pages 44-74, October.
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    5. Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414, April.
    6. Philippe Jehiel, 1999. "Information Aggregation and Communication in Organizations," Management Science, INFORMS, vol. 45(5), pages 659-669, May.
    7. Radner, Roy, 1993. "The Organization of Decentralized Information Processing," Econometrica, Econometric Society, vol. 61(5), pages 1109-1146, September.
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    Cited by:

    1. Mauleon, Ana & Schopohl, Simon & Vannetelbosch, Vincent, 2020. "Competition for leadership in teams," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 19-33.
    2. Schopohl, Simon, 2017. "Information transmission in hierarchies," Center for Mathematical Economics Working Papers 570, Center for Mathematical Economics, Bielefeld University.
    3. Foerster, Manuel, 2019. "Dynamics of strategic information transmission in social networks," Theoretical Economics, Econometric Society, vol. 14(1), January.
    4. Simon Schopohl, 2017. "Information Transmission in Hierarchies," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01491930, HAL.
    5. Simon Schopohl, 2017. "Information Transmission in Hierarchies," Post-Print halshs-01491930, HAL.

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    More about this item

    Keywords

    Social network; social dilemma; dynamic network game; strategic communication; Réseaux sociaux; jeux dynamique de réseau; communication stratégique;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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