2022 McCourt Project 1
Drawing on blackboard depicting person sharing information with a megaphone
Governance Problems in Decentralized Networks: The Case of Shareholder Activism through Digital Media
Grantee: Michele Fioretti
Duration: 2 years
Description:
Decentralized networks provide users with control over their personal information. Applied to the Internet, decentralization can reduce the market power of dominant firms, as it reduces their ability to learn consumers’ preferences. However, information sharing comes with the cost of constantly deciding whether to share information. Since the Internet is not decentralized, there is currently no data about how Internet users share information under decentralization. We, therefore, propose to analyze, estimate, and simulate a model of information sharing in an extensive decentralized network: shareholding of large corporations. We focus on shareholder activism over socially responsible issues to study the evolution of related shareholding information and the reactions of large nodes in the network (shareholders with dominant positions) to examine governance issues related to information sharing in decentralized networks. To do so, we exploit the news flow of digital media as exogenous shocks to shareholder preferences.
