Acquiring Information through Peers
American Economic Review
vol. 110,
no. 7, July 2020
(pp. 2128-52)
Abstract
We develop an endogenous network formation model, in which agents form connections to acquire information. Our model features complementarity in actions as agents care not only about accuracy of their decision-making but also about the actions of other agents. In equilibrium, the information structure is a hierarchical network, and, under weakly convex cost of forming links, the equilibrium network is core-periphery. Although agents are ex ante identical, there is ex post heterogeneity in payoffs and actions.Citation
Herskovic, Bernard, and João Ramos. 2020. "Acquiring Information through Peers." American Economic Review, 110 (7): 2128-52. DOI: 10.1257/aer.20181798Additional Materials
JEL Classification
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- D85 Network Formation and Analysis: Theory
- Z13 Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification