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- Title
The structure of information networks.
- Authors
Kannan, Rajgopal; Ray, Lydia; Sarangi, Sudipta
- Abstract
We develop a strategic model of information acquisition in networks where agents pay for all the pieces of information they acquire, including those through indirect links. The cost of information depends on the distance it traverses in the network. We consider two possibilities in this context: (1) costs increasing with distance, and (2) costs decreasing with distance. The paper also examines situations where it is more expensive to acquire information of higher value. We show that there is almost no divergence between the efficient and Nash equilibrium information architectures. We then study the effect of decay in networks where information through longer paths is cheaper. Finally, we also examine a model with costly link formation that combines both types of cost related assumptions.
- Subjects
INFORMATION networks; KNOWLEDGE management; INDUSTRIAL efficiency; INFORMATION architecture; COST control; ECONOMIC equilibrium
- Publication
Economic Theory, 2007, Vol 30, Issue 1, p119
- ISSN
0938-2259
- Publication type
Article
- DOI
10.1007/s00199-005-0046-6