I study information transmission in networks with ideological agents, having in mind political economy applications such as networks of elected policy-makers in different jurisdictions. When all players are ideologically distant from each other, the optimal network is the line in which players are ordered according to their ideologies. This ordered line network is implemented as Nash equilibrium of a game in which each link requires sponsorship by both linked agents. This is in sharp contrast with earlier results that identified the star as the optimal network for information transmission in the absence of ideology. When agents are clustered in ideologically cohesive groups, it is optimal for all agents that the clusters organize as factions: stars whose only link with the other clusters is through the star centers (the faction leaders). My results suggest positive and normative rationales for horizontal links between like-minded agents in political networks, as opposed to hierarchical networks such as the star that prevail in organizations whose agents' preferences are closely aligned.
The Economic Theory Lunchtime Workshops are convened by Meg Meyer.