This paper studies the effects of information exchange and social networks on the performance of prediction markets with endogenous information acquisition. We provide a game-theoretic framework to resolve the question: Can social networks and information exchange promote the forecast efficiency...

This paper considers a population of agents that are engaged in a listening network. The agents wish to match their actions to the true value of some uncertain (exogenous) parameter and to the actions of the other agents. Each agent begins with some initial information about the parameter and,...

Consumers can acquire information through their own search efforts or through their social network. Information diffusion via word-of-mouth communication leads to some consumers free-riding on their “friends” and less information acquisition via active search. Free-riding also has an...

Why do people appear to forgo information by sorting into “echo chambers”? We construct a highly tractable multi-sender, multi-receiver cheap talk game in which players choose with whom to communicate. We show that segregation into small, homogeneous groups can improve everybody’s...

We develop a dynamic framework of strategic information transmission through cheap talk in a social network. Privately informed agents have different preferences about the action to be implemented by each agent and repeatedly communicate with their neighbors in the network. We first characterize...

To understand new information, we exchange models or interpretations with others. This paper provides a framework for thinking about such social exchanges of models. The key assumption is that people adopt the interpretation in their network that best explains the data, given their prior...

This paper examines the informativeness of consumer information networks and their effect on price competition between firms. Under the proposed information mechanism, consumers share their initial information with the members of their network and as such become better informed. The main result...

We develop a model of information exchange through communication and investigate its implications for information aggregation in large societies. An \textit{underlying state} determines payoffs from different actions. Agents decide which others to form a costly \textit{communication link} with,...

This paper studies the profile of cooperation emerging in a context in which agents may choose to join one of two groups or stay on their own, in a world where similarity across peers matters. In particular, we investigate the role of heterogeneity in individual contributions, of the level of...

We study a strategic model of dynamic trading where agents are asymmetrically informed over common value sources of uncertainty. There is a continuum of buyers and a finite number n of sellers. All buyers are uninformed, while at least one seller is privately informed about the true state of the...