Learning faster or more precisely? Strategic experimentation in networks

Mirjam Wuggenig

VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy from Verein für Socialpolitik / German Economic Association

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.

JEL-codes: C73 D83 D85 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-gth, nep-mic and nep-net
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc15:113196

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