Network-restricted Information Aggregation: Theory and Experiment by Yi Shi

Join us for this week's event in the Behavioural, Experimental and Development Economics Seminar Series, Autumn Term 2024

Join Yi Shi, from our department, as they present their research on Network-restricted Information Aggregation: Theory and Experiment.

Abstract

This study theoretically and experimentally explores endogenous network formation in the context of information aggregation. We consider a setting where all players have common interest of guessing correct state of the world while every player is endowed with private information. Unlike previous literature on networks and information aggregation, players in this study can choose a partner to share their information with before taking the decision. To make this choice meaningful, the information of each subject is two-dimensional: (1) the color (corresponding to the state of the world) of the signal, and (2) the quality of the signal. While the color of the signal for each subject is publicly observable, the quality of the signal is only disclosed if a player forms a link with another. Therefore, the choice of the partner must be made strategically, based on both private and publicly available information. In particular, if player A forms a link with player B then A's quality of signal becomes known to B. The theoretical predictions in this setting depend on the strategic sophistication of players. The main hypothesis we aim to test is when players “reach out”, i.e. form a link with another player with a different colored signal or “stay in”, i.e. form a link with another player with the same-colored signal.

This seminar will be held in the Economics Common Room on Wednesday 9 October, at 11.30am. This event is open to all levels of study and is also open to the public. To register your place, please contact the seminar organisers.

This event is part of the Behavioural, Experimental, and Development Economics Research Seminar Series.