Learning faster or more precisely? Strategic experimentation in networks

Mirjam Wuggenig

Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich

Abstract: The paper analyzes a dynamic model of rational strategic learning in a network. It complements existing literature by providing a detailed picture of short-run dynamics in a game of strategic experimentation where agents are located in a social network. We show that the delay in information transmission caused by incomplete network structures may induce players to increase own experimentation efforts. As a consequence a complete network can fail to be optimal even if there are no costs for links. This means that in the design of networks there exists a trade-off between the speed of learning and accuracy.

Keywords: Strategic Experimentation; Networks; Learning (search for similar items in EconPapers)
JEL-codes: C73 D83 D85 (search for similar items in EconPapers)
Date: 2014-12-04
New Economics Papers: this item is included in nep-cbe, nep-gth, nep-mic, nep-net and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:trf:wpaper:485

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