Credibility and Strategic Learning in Networks

Kalyan Chatterjee and Bhaskar Dutta

No 270752, Economic Research Papers from University of Warwick - Department of Economics

Abstract: This paper studies a model of diffusion in a fixed, finite connected network. There is an interested party that knows the quality of the product or idea being propagated and chooses an implant in the network to influence other agents to buy or adopt. Agents are either “innovators”, who adopt immediately, or rational. Rational consumers buy if buying rather than waiting maximizes expected utility. We consider the conditions on the network under which efficient diffusion of the good product with probability one is a perfect Bayes equilibrium. Centrality measures and the structure of the entire network are both important. We also discuss various inefficient equilibria.

Keywords: Financial; Economics (search for similar items in EconPapers)
Pages: 39
Date: 2011-11-02
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:uwarer:270752

DOI: 10.22004/ag.econ.270752

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