References (7)





Circles of Trust

Samuel Lee

New York University (NYU) - Leonard N. Stern School of Business; Stanford Institute for Economic Policy Research (SIEPR); European Corporate Governance Institute (ECGI)

Petra Persson

Stanford University; Research Institute of Industrial Economics (IFN)

January 6, 2011

We study strategic transmission of rival information among individuals who have altruistic relations. Information sharing naturally takes the form of word-of-mouth communication. Yet, the social forces that promote communication can also undermine it. Contrary to conventional wisdom, larger social networks may spread information less, and better-connected individuals may receive less information. Therefore, when forming networks, individuals cluster into groups that share information and trust by limiting connections as a commitment to secrecy.

Keywords: Information transmission, communication, social networks, directed altruism, trust, secrecy, network formation

JEL Classification: C72, D00, D64, D83, O31

Not Available For Download

Date posted: January 9, 2011 ; Last revised: April 30, 2013

Suggested Citation

Lee, Samuel and Persson, Petra, Circles of Trust (January 6, 2011). Available at SSRN: http://ssrn.com/abstract=1736200 or http://dx.doi.org/10.2139/ssrn.1736200

Contact Information

Samuel Lee (Contact Author)
New York University (NYU) - Leonard N. Stern School of Business ( email )
44 West 4th Street
New York, NY NY 10012
United States
Stanford Institute for Economic Policy Research (SIEPR) ( email )
579 Serra Mall at Galvez St.
Stanford, CA 94305-6015
United States
European Corporate Governance Institute (ECGI) ( email )
B-1050 Brussels
Petra Persson
Stanford University ( email )
Stanford, CA 94305
United States
Research Institute of Industrial Economics (IFN) ( email )
Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
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