TY  - JOUR
AU  - Stein,Jeremy C.
TI  - Conversations Among Competitors
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13370
PY  - 2007
Y2  - September 2007
UR  - http://www.nber.org/papers/w13370
L1  - http://www.nber.org/papers/w13370.pdf
N1  - Author contact info:
Jeremy C. Stein
Federal Reserve Board of Governors
20th Street and Constitution Ave., N.W.
Washington, DC 20551
E-Mail: jeremy.c.stein@frb.gov
AB  - I develop a model of bilateral conversations in which players may honestly exchange ideas with their competitors. The key to incentive compatibility is a strong form of complementarity in the information structure: a player can only generate a useful new insight on a given topic if he has access to his counterpart's previous thoughts on the topic. I then embed this model into a linear social network in which player A first can have a conversation with player B, then player B can have a conversation with player C, and so on. I show that relatively underdeveloped ideas can travel long distances over the network and thus be shared by many agents. More valuable ideas, by contrast, tend to remain localized among small groups of agents.
ER  -