Information Sharing Networks in Linear Quadratic Games

Arbeitspapier

We study the bilateral exchange of information in the context of linear quadratic games. An information structure is here represented by a non directed network, whose nodes are agents and whose links represent sharing agreements. We first study the equilibrium use of information in any given sharing network, finding that the extent to which a piece of information is public affects the equilibrium use of it, in line with previous results in the literature. We then study the incentives to share information ex-ante, highlighting the role of the elasticity of payoffs to the equilibrium volatility of one's own strategy and of one's opponents' strategies. For the case of uncorrelated signals we fully characterize pairwise stable networks for the general linear quadratic game. For the case of correlated signals, we study pair-wise stable networks for three specific linear quadratic games - Cournot oligopoly, Keynes’ beauty contest and Public good provision - in which strategies are substitute, complement and orthogonal, respectively. We show that signals’ correlation favors the transmission of information, but may also prevent all information from being transmitted.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Nota di Lavoro ; No. 47.2013

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Asymmetric and Private Information; Mechanism Design ; Network Formation and Analysis: Theory ; Oligopoly and Other Imperfect Markets
• Subject: Information Sharing ; Networks ; Bayesian Equilibrium ; Beauty Contest ; Oligopoly

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Currarini, Sergio ; Feri, Francesco
• Event: Veröffentlichung
• (who): Fondazione Eni Enrico Mattei (FEEM)
• (where): Milano
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/74824
• Last update: 10.03.2025, 11:43 AM CET