Targeted vs. collective information sharing in networks

Arbeitspapier

We introduce a simple two-stage game of endogenous network formation and information sharing for reasoning about the optimal design of social networks like Facebook or Google+. We distinguish between unilateral and bilateral connections and between targeted and collective information sharing. Agents value being connected to other agents and sharing and receiving information. We consider multiple utility specifications. We show that the game always has an equilibrium in pure strategies and then we study how the network design and the utility specifications affect welfare. Surprisingly, we find that in general, targeted information sharing is not necessarily better than collective information sharing. However, if all agents are either "babblers" or "friends", irrespective of whether the network is unilateral or bilateral, in equilibrium, targeted information sharing yields higher welfare than collective information sharing.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 152

Classification and Topics

• Classification: Wirtschaft ; Market Design ; Network Formation and Analysis: Theory ; Noncooperative Games ; Existence and Stability Conditions of Equilibrium
• Subject: Networks ; network formation ; unilateral connections ; bilateral connections ; targeted information sharing ; collective information sharing ; Google ; Facebook ; babblers ; friends

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kushnir, Alexey ; Nichifor, Alexandru
• Event: Veröffentlichung
• (who): University of Zurich, Department of Economics
• (where): Zurich
• (when): 2014

Further information

• DOI: doi:10.5167/uzh-95041
• Handle: http://hdl.handle.net/10419/111212
• Last update: 10.03.2025, 11:44 AM CET