Information acquisition interactions in two-player quadratic games

Jiménez-Martínez, Antonio

doi:10.1007/s00182-013-0389-3

Cited by 1 publication

(4 citation statements)

References 22 publications

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“…As in the related literature (see, e.g., [2,4,[6][7][8]), the existence of symmetric BNE is guaranteed under the quadratic-Gaussian structure that the model assumes. To obtain a solution to Equation (2), we must study how information is aggregated and how this influences the agents' optimal actions.…”

Section: Equilibrium and Social Welfarementioning

confidence: 84%

“…The main intuition is conveyed using a beauty contest game (as in [2,4,[6][7][8]). Each agent i's utility is given by…”

Section: Preferences and Information Structurementioning

confidence: 99%

“…Hence, we need to account for arbitrarily higher-order average posterior expectations over θ. To formalize these average posterior expectations, let E[θ] = ∑ s∈S g E s [θ] be the average posterior expectation on the state over the collection of possible subsets of signals 8 . We begin with the 0-order average posterior expectation.…”

Section: Equilibrium and Social Welfarementioning

confidence: 99%

“…The idea of using a knowledge index matrix to track individual arbitrarily higher-order beliefs in a network was originally proposed by [9]. An application of the knowledge index matrix to information acquisition problems in small populations has been recently provided by [8].…”

Section: Equilibrium and Social Welfarementioning

confidence: 99%

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On Information Aggregation and Interim Efficiency in Networks

Jiménez-Martínez

2017

Games

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This paper considers a population of agents that are engaged in a listening network. The agents wish to match their actions to the true value of some uncertain (exogenous) parameter and to the actions of the other agents. Each agent begins with some initial information about the parameter and, in addition, is able to receive further information from their neighbors in the network. I derive a closed expression for the (interim) social welfare loss that depends on the initial information structure and on the possible pieces of information that can be gathered under the network. Then, I explore how changes in the network may affect social welfare for extreme levels of complementarity in the agents' actions. When the level of complementarity is very high, efficiency is achieved regardless of the network structure. For very low levels of complementarity in actions, efficiency can be either associated to more sparse or denser networks, depending on the size of the induced informative gains. The implications of this paper are relevant in security environments where agents are naturally interpreted as analysts who try to forecast the value of a parameter that describes a threat to security.

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