26 Pages Posted: 18 Mar 2017
Date Written: March 15, 2017
Information goods (or information for short) play an essential role in modern economies. We consider a trading framework that takes into account particular properties of these goods. In this framework, information has some idiosyncratic value for each consumer, exerts externalities and can be freely replicated and transmitted through links in a communication network. Prices paid for information are determined through a series of bilateral negotiations by connected players. This decentralized approach leads to unique players’ payoffs in any exogenous network. We provide formulae to compute these payoffs and use the latter to analyze a two-stage scenario, where players form a communication network before trading information.
Suggested Citation: Suggested Citation
Polanski, Arnold, Communication Networks, Externalities and the Price of Information (March 15, 2017). Available at SSRN: https://ssrn.com/abstract=2933560