The Law of the Few

The law of the few refers to the following empirical phenomenon: in social groups a great proportion of individuals get most of their information from a very small subset of the group. This small set has many more connections than the average of the group. In some situations these few individuals acquire information as well as they convey it to others, while in other settings they act as pure connectors. Moreover, there are no significant observable differences between this select few and the rest of the social group. We are led to ask: can the law of the few be a result of strategic interaction among identical individuals? We develop a model in which players personally acquire information as well as form connections with others to access the information which they have acquired. Our main finding is that the the ‘law of the few’ is a robust equilibrium outcome in this model. JEL classification: C72, D00, D83, H41, O31.