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CREDIBILITY AND STRATEGIC LEARNING IN NETWORKS
Author(s) -
Chatterjee Kalyan,
Dutta Bhaskar
Publication year - 2016
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/iere.12175
Subject(s) - credibility , product (mathematics) , bayes' theorem , diffusion , quality (philosophy) , microeconomics , computer science , mathematical economics , business , economics , mathematics , artificial intelligence , bayesian probability , political science , law , philosophy , physics , geometry , epistemology , thermodynamics
We analyze a model of diffusion in a fixed, finite connected network. There is an interested party that knows the quality of the product being propagated and chooses an implant in the network to influence other agents to buy. Agents are either “innovators,” who adopt immediately, or rational. Rational consumers buy if buying instead of waiting maximizes expected utility. We consider the conditions on the network under which optimal diffusion of the good product with probability 1 is a perfect Bayes equilibrium.