| By: |
Antonio Jimenez-Martinez (School of Economics, Universidad de Guanajuato) |
| Abstract: |
We develop a model of information transmission in networks where agents decide
on costly
information extraction from their neighbors. Agents have incomplete
and complementary information
about the underlying state. For a exogenously
given network, each agent decides first on
information extraction from her
neighbors and then, after processing the information extracted,
takes an
action. The payoff to each agent has two components: (i) a concern about oneÕs
own
action and (ii) a concern about the other agentsÕ actions or team concern.
We formalize the
extraction of information by considering that each agent is
able, by incurring a cost, to induce
each of her neighbors to send her a
signal. Then, each receiver updates her beliefs according
to BayesÕ rule. We
characterize both the efficient and the equilibrium information extraction
strategy
profiles for the overall game and relate them to the network
architecture. |
| Keywords: |
Communication Networks, Incomplete Information, Information Extraction, Complementarities, Coordination |
| JEL: |
C72 D82 D83 D85 |
| URL: |
http://d.repec.org/n?u=RePEc:gua:wpaper:ec200801&r=ict |