The Relative Contributions of Private Information Sharing and Public Information Releases to Information Aggregation

Darrell Duffie, Semyon Malamud and Gustavo Manso
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Gustavo Manso: Sloan School of Business, MIT

No 09-33, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: We calculate learning rates when agents are informed through both public and private observation of other agents’ actions. We provide an explicit solution for the evolution of the distribution of posterior beliefs. When the private learning channel is present, we show that convergence of the distribution of beliefs to the perfect-information limit is exponential at a rate equal to the sum of the mean arrival rate of public information and the mean rate at which individual agents are randomly matched with other agents. If, however, there is no private information sharing, then convergence is exponential at a rate strictly lower than the mean arrival rate of public information.

Keywords: information percolation; search; learning rates. (search for similar items in EconPapers)
JEL-codes: D82 D83 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2009-08
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: The relative contributions of private information sharing and public information releases to information aggregation (2010)
Working Paper: The Relative Contributions of Private Information Sharing and Public Information Releases to Information Aggregation (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp0933

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