Information Diffusion in a Cobweb World

Based on an assumption of one-way learning, Granato and Wong (2004) consider a framework with two groups of agents, Group L and Group H, where Group L is less attentive and uses the expectations of the more or highly attentive Group H to update their forecasts. The paper shows the boomerang effect, which is defined as a situation where the inaccurate forecasts of a less attentive group confound a more attentive group\u27s forecasts. This extended paper relaxes the one-way learning assumption and investigates the case that both groups are learning from each other, i.e., dual learning. Simulations suggest that a boomerang effect still exists. Surprisingly, although the highly attentive group has a full set of information to make forecasts, they still learn from Group L. The reason is that Group H adjusts their forecasts because there is available information in Group L\u27s forecast measurement error

Communities, Knowledge Creation, and Information Diffusion

In this paper, we examine how patterns of scientific collaboration contribute to knowledge creation. Recent studies have shown that scientists can benefit from their position within collaborative networks by being able to receive more information of better quality in a timely fashion, and by presiding over communication between collaborators. Here we focus on the tendency of scientists to cluster into tightly-knit communities, and discuss the implications of this tendency for scientific performance. We begin by reviewing a new method for finding communities, and we then assess its benefits in terms of computation time and accuracy. While communities often serve as a taxonomic scheme to map knowledge domains, they also affect how successfully scientists engage in the creation of new knowledge. By drawing on the longstanding debate on the relative benefits of social cohesion and brokerage, we discuss the conditions that facilitate collaborations among scientists within or across communities. We show that successful scientific production occurs within communities when scientists have cohesive collaborations with others from the same knowledge domain, and across communities when scientists intermediate among otherwise disconnected collaborators from different knowledge domains. We also discuss the implications of communities for information diffusion, and show how traditional epidemiological approaches need to be refined to take knowledge heterogeneity into account and preserve the system's ability to promote creative processes of novel recombinations of idea

Information diffusion in international markets

Globalization has been a persistent phenomenon of the post-war period. The gross volume of cross-border capital flows has grown at an average of 25 percent a year, and trade in goods and services has also increased, albeit not as dramatically, but at least twice as fast as world GDP over the past 20 years. Yet, consumers and investors continue to spend and hold a disproportionate share of their assets in local markets-the so-called home-bias has been emphasized by many recent empirical studies. For many researchers, this home bias reflects information asymmetries and the fact that acquiring information across international borders is relatively costly. The main objective of the authors is to identify channels through which information gets disseminated across international markets. They consider three potential channels through which information can affect import and foreign equity purchase decisions in 14 OECD countries. The first channel consists of information spillovers from the commercial to the financial markets and vice-versa. Financial investors and importers share common information, which is also frequently conveyed to them by the same source-banks or financial intermediaries. The second and third channels emphasize seller and buyer reputations in international markets. The seller reputation channel stresses the importance given by, for example, importers in the United States who are considering buying products from Italy to the experience that Canadian and Japanese importers may have accumulated on Italian exporters. The buyer reputation channel examines to what extent a foreign investor or trader seeks information on the reliability of the foreign buyer by assessing his reputation in other countries. While the last two channels are equally important in explaining bilateral import flows, buyer reputation appears to be of greater importance for equity flows in the sample. The authors argue that these three channels may help provide some insights about the recent episodes of contagion across markets and countries that occurred over the past decade. These information channels can create virtuous or vicious circles that may, in turn, lead to unexpected changes in investors'and traders'behaviors across markets.International Terrorism&Counterterrorism,Economic Theory&Research,Financial Intermediation,Environmental Economics&Policies,Labor Policies,Environmental Economics&Policies,Economic Theory&Research,Financial Intermediation,Health Economics&Finance,ICT Policy and Strategies