Connectors and Influencers

We study a setting in which personal acquisition of information is costly and main taining personal contacts to share information socially is also costly. The theory pre dicts star networks, with small groups sustaining an active hub and large groups allow ing, in addition, for an inactive hub equilibrium. Experiments with small (8 subjects) and large (50 subjects) groups show star-like networks throughout. In small groups, behavior matches the active hub prediction. In large groups, hubs are inactive or en gage in activity far in excess of the active hub equilibrium, depending on how much information subjects are given on their own and others’ earnings. The hub’s activity level shapes relative earnings of subjects and the overall performance of the group