Event

Lunchseminar in Economics: Strategic Information Disclosure in Networks

  • Conférencier  Francesco Squintani, University of Warwick, UK

  • Lieu

    Please contact dem@uni.lu

    6, rue Richard Coudenhove-Kalergi

    L-1359, Luxembourg, LU

  • Thème(s)
    Sciences économiques & gestion

Supported by the Luxembourg National Research Fund (FNR) 17539924

Abstract

I study strategic information disclosure in networks. When agents’ preferences are sufficiently diverse, the optimal network is the line in which the agents are ordered according to their ideologies. Such optimal networks obtain as Nash equilibria of a game in which each link requires sponsorship by both connected agents, and are the unique strongly pairwise stable networks. These results overturn classical results of non-strategic information transmission in networks, where the optimal and pairwise stable network is the star.

In political economy environments such as networks of policy-makers, interest groups, or judges, these results suggest positive and normative rationales for “horizontal” links between like-minded agents in political networks, as opposed to hierarchical networks, that have been shown to be optimal in organisations where agents’ preferences are more closely aligned.

When political agents are partitioned in ideologically diverse groups, each composed of agents with similar views, it is optimal for all politicians that the groups segregate into factions: stars whose only links are with ideologically close groups through star centers (the faction leaders). A normative case for factionalisation is thus provided.

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