Communication networks, externalities and the price of information

Polanski, Arnold (2019) Communication networks, externalities and the price of information. Rand Journal of Economics, 50 (2). pp. 481-502. ISSN 0741-6261

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Information goods (or information for short) play an essential role in modern economies. We consider a trading framework where information has some idiosyncratic value for each consumer, exerts externalities and can be freely replicated and transmitted through links in a communication network. Prices paid for information are determined via the (asymmetric) Nash Bargaining Solution with endogenous disagreement points. This decentralized approach leads to unique prices and payoffs in any exogenous network. We use these payoffs to find connection structures that emerge under different externality regimes in pre-trade network formation stage. An application to citation graphs results in eigenvector-like measures of intellectual influence.

Item Type: Article
Uncontrolled Keywords: networks,information,externalities,economics, econometrics and finance(all) ,/dk/atira/pure/subjectarea/asjc/2000
Faculty \ School: Faculty of Social Sciences > School of Economics
Related URLs:
Depositing User: LivePure Connector
Date Deposited: 18 Jun 2018 12:30
Last Modified: 27 May 2020 23:56
DOI: 10.1111/1756-2171.12277

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