Goyal, S., Rosenkranz, S., Weitzel, U. and Buskens, V.

Information Acquisition and Exchange in Social Networks

The Economic Journal

Vol. 127(606) pp. 2302–2331 (2017)

Abstract: A central feature of social networks is information sharing. The Internet and related computing technologies shape the relative costs of private information acquisition and forming links with others. This article presents an experiment on the effects of changing costs. We find that a decline in relative costs of linking makes private investments more dispersed and gives rise to denser social networks. Aggregate investment falls but individuals’ access to investment remains stable, due to increased networking. The overall effect is an increase in individual utility and aggregate welfare.

Author links: Sanjeev Goyal  

Publisher's Link: https://doi.org/10.1111/ecoj.12395

Open Access Full Text: https://www.repository.cam.ac.uk/handle/1810/254904

Cambridge Working Paper in Economics Version of Paper: Information Acquisition and Exchange in Social Networks, Goyal, S., Rosenkranz, S., Weitze, U. and Buskens, V., (2015)