When Knowing Early Matters: Gossip, Percolation and Nash Equilibria

Continually arriving information is communicated through a network of n agents, with the value of information to the j’th recipient being a decreasing function of j/n, and communication costs paid by recipient. Regardless of details of network and communication costs, the social optimum policy is to communicate arbitrarily slowly. But selfish agent behavior leads to Nash equilibria which (in the n → ∞ limit) may be efficient (Nash payoff = social optimum payoff) or wasteful (0 < Nash payoff < social optimum payoff) or totally wasteful (Nash payoff = 0). We study the cases of the complete network (constant communication costs between all agents), the grid with only nearest-neighbor communication, and the grid with communication cost a function of distance. Many variant problems suggest themselves. The main technical tool is analysis of the associated first passage percolation process (representing spread of one item of information) and in particular its “window width”, the time interval during which most agents learn the item. xxx draft. Written in statistical physics style – not attempting rigorous proofs. ∗Research supported by N.S.F. Grant DMS0704159