Information Acquisition and Exchange in Social Networks

Sanjeev Goyal, Stephanie Rosenkranz, Utz Weitze and Vincent Buskens

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: A central feature of social networks is information sharing. The Internet and related computing technologies define the relative costs of private information acquisition and forming links with others. This paper presents an experiment on the effects of changing costs.We find that a decline in relative costs of linking makes private investments more dispersed and gives rise to denser social networks. Aggregate investment falls, but individuals access to investment remains stable, due to increased networking. The overall effect is a significant increase in individual utility and aggregate welfare.

Date: 2015-12-21
New Economics Papers: this item is included in nep-exp, nep-gth, nep-net, nep-soc and nep-ure
Note: sg472
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Journal Article: Information Acquisition and Exchange in Social Networks (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:1566

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