The Law of the Few
Andrea Galeotti, Sanjeev Goyal
American Economic Review · 2010 · Volume 100 · Issue 4
Abstract
Empirical work shows that a large majority of individuals get most of their information from a very small subset of the group, viz., the influencers; moreover, there exist only minor differences between the observable characteristics of the influencers and the others. We refer to these empirical findings as the Law of the Few. This paper develops a model where players personally acquire information and form connections with others to access their information. Every (robust) equilibrium of this model exhibits the law of the few. (JEL D83, D85, Z13)
Keywords
Search, Learning, Information and Knowledge, Communication, Belief, Network Formation and Analysis: Theory, Economic Sociology, Economic Anthropology, Social and Economic Stratification
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