Communication and Information Acquisition in Networks

This paper deals with information acquisition and communication in networked organizations. Agents receive private signals about a payoff-relevant parameter and may communicate it to other players to whom they are linked. I derive a key condition that ensures truthful communication. Since the degree of substitution between information acquired and obtained through personal contacts depends on the truthfulness of communication, information acquisition efforts may not be monotonic. Finally, I show that these results hold in a modified version of the game that includes potentially infinite many rounds of communication.