THE VALUE OF PRIVATE INFORMATION WITHIN EVOLVING GROUPS

Abstract

This note offers an analytical framework aimed at explaining how individual agents purposefully act with the goal of managing the value of their information sets. Agents undertake a process of private accumulation of information, which takes into account the non-rival nature of this peculiar entity. Non rivalry introduces an externality that might trigger long-term endogenous fluctuations. The dynamics of interaction, namely the possibility of entering or exiting the group to which the individuals belong, will determine time trajectories for the information flows that are unique for the specific conditions of interaction that are being considered at a given moment.