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Rumor investigation in networks

Wentao Fu and Yang Sun

Economic Modelling, 2021, vol. 98, issue C, 168-178

Abstract: This paper studies how people react to rumors from the perspective of social networks. Before making decisions to match the state of a rumor, individuals in a social network decide whether to investigate the rumor's authenticity. An unusual signal, which could possibly be detected if the rumor is fake, is local public information. We show that an individual is a bystander when few linked neighbors investigate, is a free-rider when many neighbors are investigators, and becomes an investigator only when the number of linked neighbors falls in a certain range. We use the insulated set of a core of the network to characterize the set of investigators in an equilibrium that induces the least number of bystanders. Only those who belong to the core make decisions upon observed signals, while those outside the core make decisions based on prior belief in this equilibrium.

Keywords: Rumors; Information acquisition; Local public information; Core; Insulated set (search for similar items in EconPapers)
JEL-codes: C72 D83 D91 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.econmod.2021.02.021

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