# 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
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.
Developed by Paolo Gittoi