Acquiring Information Through Peers

71 Pages Posted: 3 Jun 2015 Last revised: 28 Nov 2018

See all articles by Bernard Herskovic

Bernard Herskovic

University of California, Los Angeles (UCLA) - Anderson School of Management

Joao Ramos

Marshall School of Business - University of Southern California

Date Written: August 2, 2018

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. Even if agents are ex-ante identical, there is ex-post heterogeneity in payoffs and actions. Finally, we study how individual characteristics define agents' roles in the network, highlighting the importance of resoluteness and information precision.

Keywords: Network Formation, Information Acquisition, Coordination

JEL Classification: D83, D85

Suggested Citation

Herskovic, Bernard and Ramos, Joao, Acquiring Information Through Peers (August 2, 2018). Available at SSRN: https://ssrn.com/abstract=2613202 or http://dx.doi.org/10.2139/ssrn.2613202

Bernard Herskovic

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

Los Angeles, CA 90095-1481
United States

HOME PAGE: http://bernardherskovic.com

Joao Ramos (Contact Author)

Marshall School of Business - University of Southern California ( email )

701 Exposition Boulevard, STE 205
Los Angeles, CA 90089-1422
United States

HOME PAGE: http://www.joaoaramos.com/

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