Citations and Diffusion of Knowledge: An Economic Analysis∗

Citation patterns in many academic disciplines have displayed a pattern of connections similar to those observed in many other different real-world contexts, such as links on the world-wide web. The various models that have been proposed to generate such networks, generically called "preferential attachment models", rely solely on random link formation and copying and do not take into account rational choice among authors in an academic community, which would consider the competition for citations and ensuing professional success. In this paper we construct such a model with rational agents to understand some aspects of citation patterns and knowledge diffusion in a specific academic field .. We show that rivalry or competition in citations might be an obstacle to diffusion, depending on behavioral rules specific to the field. Increased heterogeneity in the quality of papers reduces this effect. After considering models with complete information, we analyse models with private information about quality of one’s own paper and use the framework to consider the interaction of this process with acquaintance networks and strategic entry. Superimposing the citation process on an acquaintance network yields patterns different from preferential attachment. Strategic entry leads to cascades of papers. Though we might have ex-ante efficiency in some equilibria, ex-post efficiency is not guaranteed. Ex post efficiency ∗Revision of February 2007 paper. Preliminary and incomplete draft. †Department of Economics, The Pennsylvania State University, University Park, Pa. 16802.. email: [email protected]. I would like to thank Paul David, Sanjeev Goyal, Anindya Sen and Arijit Sen for useful comments. ‡Department of Economics, The Pennsylvania State University, University Park, Pa. 16802. email:[email protected]. I would like to thank Neil Wallace and Vijay Krishna for their valuable comments on an earlier draft.