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Individual Search and Social Networks

Sanjeev Goyal, Stephanie Rosenkranz (), Utz Weitzel and Vincent Buskens
Additional contact information
Vincent Buskens: Department of Sociology, Utrecht University

No 2014.49, Working Papers from Fondazione Eni Enrico Mattei

Abstract: The explosion in online social networks motivates an enquiry into their structure and their welfare effects. A central feature of these networks is information sharing: online social networks lower the cost of getting information from others. These lower costs affect the attractiveness of individual search vis-a-vis a reliance on social networks. The paper reports the findings of an experiment on these effects. Our experiment shows that online networks can have large effects. Information acquisition is more dispersed and it is accompanied by denser social networks. Aggregate investment in information acquisition falls, but information available to individuals remains stable, due to increased networking. The overall effect is a significant increase in individual utility and aggregate welfare.

Keywords: Social; networks (search for similar items in EconPapers)
JEL-codes: D83 D85 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp, nep-gth, nep-ict, nep-net, nep-soc and nep-ure
Date: 2014-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

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