Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/74824
Authors: 
Currarini, Sergio
Feri, Francesco
Year of Publication: 
2013
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 47.2013
Abstract: 
We study the bilateral exchange of information in the context of linear quadratic games. An information structure is here represented by a non directed network, whose nodes are agents and whose links represent sharing agreements. We first study the equilibrium use of information in any given sharing network, finding that the extent to which a piece of information is public affects the equilibrium use of it, in line with previous results in the literature. We then study the incentives to share information ex-ante, highlighting the role of the elasticity of payoffs to the equilibrium volatility of one's own strategy and of one's opponents' strategies. For the case of uncorrelated signals we fully characterize pairwise stable networks for the general linear quadratic game. For the case of correlated signals, we study pair-wise stable networks for three specific linear quadratic games - Cournot oligopoly, Keynes’ beauty contest and Public good provision - in which strategies are substitute, complement and orthogonal, respectively. We show that signals’ correlation favors the transmission of information, but may also prevent all information from being transmitted.
Subjects: 
Information Sharing
Networks
Bayesian Equilibrium
Beauty Contest
Oligopoly
JEL: 
D43
D82
D85
L13
Document Type: 
Working Paper

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