Can A Social Planner Manipulate Network Dynamics And Solve Coordination Problems?

64 Pages Posted: 28 Apr 2020

See all articles by Zaruhi Hakobyan

Zaruhi Hakobyan

affiliation not provided to SSRN; Universite du Luxembourg - Luxembourg School of Finance

Date Written: April 27, 2020

Abstract

This paper aims to build an algorithm of network dynamics with decision-making under incomplete information. Accordingly, it tries to identify if a social planner reduces the influence of individual biases, such as confirmation bias or assimilation bias on agents actions, and solve a coordination problem. The research questions are the following: " Can the social planner increase social welfare, by manipulating the set of possible invitations and annoyances, without directly changing a network structure?", " What are the main drivers of increasing social-planner utility functions?" "How do the results change if the social planner has incomplete information or wrong priors about the fundamental variable?" For this research, a "Liberal Social Planner" was created; a process through which network members get suggestions depending on its utility function. The results have potential applications for the management of social media platforms by the owners of these platforms. Platforms can develop robots that can help their users be more informed and more satisfied. As we live in a world of virtual connectedness, people seem to obtain more information from online network peers than from experts.

Keywords: network dynamics, internet, higher-orderbeliefs, learning, expert

JEL Classification: 85, D83, D82, D72, C78

Suggested Citation

Hakobyan, Zaruhi and Hakobyan, Zaruhi, Can A Social Planner Manipulate Network Dynamics And Solve Coordination Problems? (April 27, 2020). Higher School of Economics Research Paper No. WP BRP 229/EC/2020, Available at SSRN: https://ssrn.com/abstract=3587024 or http://dx.doi.org/10.2139/ssrn.3587024

Zaruhi Hakobyan (Contact Author)

affiliation not provided to SSRN

Universite du Luxembourg - Luxembourg School of Finance ( email )

162a, avenue de la Faïencerie
Luxembourg-Limpertsberg, L-1511
Luxembourg

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