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Persuasion in Networks

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  • Squintani, Francesco

    (University of Warwick)

Abstract

This paper brings together two major research streams in economic theory : information transmission in networks and strategic communication. The model embeds persuasion games of strategic disclosure by Milgrom (1981) into the communication network framework by Jackson and Wolinsky (1996). I find that the unique optimal network is a line in which players are ordered according to their bliss points. This ordered line is also pairwise-stable. This …nding stands in sharp contrast to previous results in network studies, that identify stars as the optimal and pairwise-stable networks when communication is non-strategic and subject to technological constraints. While stars are the most centralized minimally-connected networks, the line is the most decentralized one. These results may be especially relevant to political economy applications, such as networks of policymakers, interest groups, or judges

Suggested Citation

  • Squintani, Francesco, 2024. "Persuasion in Networks," CRETA Online Discussion Paper Series 88, Centre for Research in Economic Theory and its Applications CRETA.
    • Handle: RePEc:wrk:wcreta:88
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    File URL: https://warwick.ac.uk/fac/soc/economics/research/centres/creta/papers/manage/creta88_-_francesco_squintani.pdf
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    References listed on IDEAS

    as
    1. Skinner, Dj, 1994. "Why Firms Voluntarily Disclose Bad-News," Journal of Accounting Research, Wiley Blackwell, vol. 32(1), pages 38-60.
    2. Marco Battaglini, 2002. "Multiple Referrals and Multidimensional Cheap Talk," Econometrica, Econometric Society, vol. 70(4), pages 1379-1401, July.
    3. Grossman, Sanford J, 1981. "The Informational Role of Warranties and Private Disclosure about Product Quality," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 461-483, December.
    4. Daron Acemoglu & Munther A. Dahleh & Ilan Lobel & Asuman Ozdaglar, 2011. "Bayesian Learning in Social Networks," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 78(4), pages 1201-1236.
    5. Caldeira, Gregory A., 1985. "The Transmission of Legal Precedent: A Study of State Supreme Courts," American Political Science Review, Cambridge University Press, vol. 79(1), pages 178-194, March.
    6. Ivanov, Maxim, 2010. "Communication via a strategic mediator," Journal of Economic Theory, Elsevier, vol. 145(2), pages 869-884, March.
    7. Paul R. Milgrom, 1981. "Good News and Bad News: Representation Theorems and Applications," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 380-391, Autumn.
    8. Paula Onuchic & João Ramos, 2023. "Disclosure and Incentives in Teams," Economics Series Working Papers 1021, University of Oxford, Department of Economics.
    9. Fowler, James H. & Johnson, Timothy R. & Spriggs, James F. & Jeon, Sangick & Wahlbeck, Paul J., 2007. "Network Analysis and the Law: Measuring the Legal Importance of Precedents at the U.S. Supreme Court," Political Analysis, Cambridge University Press, vol. 15(3), pages 324-346, July.
    10. Gilligan, Thomas W & Krehbiel, Keith, 1987. "Collective Decisionmaking and Standing Committees: An Informational Rationale for Restrictive Amendment Procedures," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 3(2), pages 287-335, Fall.
    11. Paula Onuchic & Jo~ao Ramos, 2023. "Disclosure and Incentives in Teams," Papers 2305.03633, arXiv.org.
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