Connectors and influencers

Abstract

This paper reports an experiment on costly information purchase and link formation for information gathering. A `star' network with two information con gurations is predicted - a pure influence outcome in which the hub purchases information while all others free ride and a pure connector outcome in which the hub purchases no information and the peripheral players purchase information. The latter exists only for large groups and the former existsregardless of group size. We test these predictions on a new experimental platform with asynchronous activity in continuous time. Our experiments provide strong support for the predictions with evidence on the role of group size and payoff information. In large groups, the pure influencer outcome with excessive information purchase is prevalent when subjects only see their own payoffs, whereas the pure connector outcome becomes common when subjects see everyone's payoffs.