Information sharing networks in linear quadratic games

Sergio Currarini () and Francesco Feri

International Journal of Game Theory, 2015, vol. 44, issue 3, 732 pages

Abstract: We study the bilateral exchange of information in the context of linear quadratic games. An information structure is here represented by a non directed network, whose nodes are agents and whose links represent sharing agreements. We first study the equilibrium use of information given the network, finding that the extent to which a piece of information is observed by others affects the equilibrium use of it, in line with previous results in the literature. We then study the incentives to share information ex-ante, highlighting the role of the elasticity of payoffs to the equilibrium volatility of one’s own strategy and of opponents’ strategies. For the case of uncorrelated signals we fully characterise pairwise stable networks for the general linear quadratic game. For the case of correlated signals, we study pairwise stable networks for three specific linear quadratic games—Cournot Oligopoly, Keynes’ Beauty Contest and a Public Good Game—in which strategies are substitute, complement and orthogonal, respectively. We show that signals’ correlation favours the transmission of information, but may also prevent all information from being transmitted. Copyright Springer-Verlag Berlin Heidelberg 2015

Keywords: Information sharing; Networks; Bayesian equilibrium; Beauty Contest; Oligopoly; D43; D82; D85; L13 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (17)

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Related works:
Working Paper: Information Sharing Networks in Linear Quadratic Games (2013)
Working Paper: Information Sharing Networks in Linear Quadratic Games (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:spr:jogath:v:44:y:2015:i:3:p:701-732

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DOI: 10.1007/s00182-014-0450-x

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