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Home > The Value of Network Information: Assortative Mixing Makes the Difference

The Value of Network Information: Assortative Mixing Makes the Difference

Working paper
Author/s: 
Mohamed Belhaj, Frédéric Deroïan
Issue number: 
2016-18
Series: 
AMSE Working Papers
Publisher: 
Aix-Marseille School of Economics
Year: 
2016
Working Paper [1]
We study the value of network information in a context of monopoly pricing in the presence of local network externalities. We compare a setting in which all players, i.e. the monopoly and consumers, know the network structure and consumers’ private preferences with a setting in which players only know the joint distribution of preferences, in-degrees and out-degrees. We give conditions under which network information increases profit or/and consumer surplus. The analysis reveals the crucial role played by four properties: degree assortativity, homophily (in preferences), preference-degree assortativity and preference-Bonacich centrality assortativity.
Tags: 
Industrial Organisation [2]
Network Games [3]

Source URL:http://www.coalitiontheory.net/content/value-network-information-assortative-mixing-makes-difference

Links
[1] http://www.greqam.fr/sites/default/files/_dt/2012/wp_2016_-_nr_18.pdf [2] http://www.coalitiontheory.net/research-areas/industrial-organisation [3] http://www.coalitiontheory.net/research-areas/network-games