2008/11/18 by Darrell Duffie, Semyon Malamud, Duffie, Darrell +3
Decision Sciences · Economics, Econometrics and Finance · Mathematics · Social Sciences · #Economic theories and models #Experimental Behavioral Economics Studies #FOS: Mathematics #Game Theory and Applications #Probability (math.PR) #math.PR
paper · pdf · doi:10.48550/arxiv.0811.3023
arxiv created 2008/11/18 · openalex publication_date 2008/11/18 · arxiv updated 2009/12/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
We solve for the equilibrium dynamics of information sharing in a large population. Each agent is endowed with signals regarding the likely outcome of a random variable of common concern. Individuals choose the effort with which they search for others from whom they can gather additional information. When two agents meet, they share their information. The information gathered is further shared at subsequent meetings, and so on. Equilibria exist in which agents search maximally until they acquire sufficient information precision, and then minimally. A tax whose proceeds are used to subsidize the costs of search improves information sharing and can in some cases increase welfare. On the other hand, endowing agents with public signals reduces information sharing and can in some cases decrease welfare.