Information Flows And Networks I

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Search and Optimal Stopping

In the "Information Flows and Networks" section of this tutorial we consider the larger context within which homo computicus and homo economicus are constrained to operate - the topologies of informational networks.

One issue closely related to processing of information in organizational settings is optimal search behavior. Oftentimes, a rational agent can analyze the information flows and network structure around her, and identify the optimal stopping point in the information gathering process. In the words of Van Alstyne and Bulkley,

Hypothesis 9a: Efficient information search relies on structuring a solution to provide a balanced index, sorting choices to provide best options first, and stopping when the net expected value of the best unsampled choice no longer exceeds the best sampled choice.

In this topic, we present theoretical simulations and discuss concrete examples that serve to illustrate this important concept.

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