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Information Transmission in Hierarchies

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  • Simon Schopohl

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, Universität Bielefeld, UCL - Université Catholique de Louvain = Catholic University of Louvain, EDEEM - European Doctorate in Economics Erasmus Mundus - UP1 - Université Paris 1 Panthéon-Sorbonne - Universität Bielefeld = Bielefeld University - UCL - Université Catholique de Louvain = Catholic University of Louvain - EHESS - École des hautes études en sciences sociales - UvA - University of Amsterdam [Amsterdam] = Universiteit van Amsterdam - NOVA - Universidade Nova de Lisboa = NOVA University Lisbon - Université de Venise Ca’ Foscari | Università Ca’ Foscari di Venezia)

Abstract

We analyze a game in which players with unique information are arranged in a hierarchy. In the lowest layer each player can decide in each of several rounds either to pass the information to his successor or to hold. While passing generates an immediate payoff according to the value of information, the player can also get an additional reward if he is the last player to pass. Facing this problem while discounting over time determines the player's behavior. Once a successor has collected all information from his workers he starts to play the same game with his successor. We state conditions for different Subgame Perfect Nash Equilibria and analyse the time it takes each hierarchy to centralize the information. This allows us to compare different structures and state which structure centralizes fastest depending on the information distribution and other parameters. We show that the time the centralization takes is mostly affected by the least informed players.

Suggested Citation

  • Simon Schopohl, 2017. "Information Transmission in Hierarchies," Post-Print halshs-01491930, HAL.
    • Handle: RePEc:hal:journl:halshs-01491930
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01491930v1
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    References listed on IDEAS

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    Keywords

    communication network; dynamic network game; hierarchical structure; information transmission;
    All these keywords.

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