In an economy of interacting agents with both idiosyncratic and aggregate shocks, we examine how the structure of private information influences aggregate volatility. The maximal aggregate volatility is attained in a noise free information structure in which the agents confound idiosyncratic and...

In an economy of interacting agents with both idiosyncratic and aggregate shocks, we examine how the information structure determines aggregate volatility. We show that the maximal aggregate volatility is attained in a noise free information structure in which the agents confound idiosyncratic...

In an economy of interacting agents with both idiosyncratic and aggregate shocks, we examine how the structure of private information in fluences aggregate volatility. The maximal aggregate volatility is attained in a noise free information structure in which the agents confound idiosyncratic...

Incomplete information, local interaction, and random matching games all share a common structure. A type or player interacts with various subsets of the set of all types/players. A type/player's total payoff is additive in the payoffs from these various interactions. This paper describes a...