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Costly participation and heterogeneous preferences in informational committees

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Author Info
Hongbin Cai

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Abstract

Informational committees are groups of people who are designated to gather information. This article develops a simple model of committee size based on costly participation and preference heterogeneity. In a setting in which the information structure and policy preferences are both represented by normal random variables, I characterize an equilibrium under the mean decision rule and derive the optimal committee size. I show that when effort costs are sufficiently high, preference heterogeneity can provide members additional incentives to gather information, and thus the optimal committee size and the principal's expected payoff can increase in the heterogeneity of committee members' policy preferences. Copyright (c) 2009, RAND.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1756-2171.2008.00060.x
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Publisher Info
Article provided by RAND Corporation in its journal The RAND Journal of Economics.

Volume (Year): 40 (2009)
Issue (Month): 1 ()
Pages: 173-189
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Handle: RePEc:bla:randje:v:40:y:2009:i:1:p:173-189

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  1. Caillaud, Bernard & Tirole, Jean, 2007. "Consensus Building: How to Persuade a Group," IDEI Working Papers 435, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
    Other versions:
  2. Dezsö Szalay & Ramon Arean, 2005. "Communicating with a Team of Experts," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 05.12, Université de Lausanne, Faculté des HEC, DEEP. [Downloadable!]
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This page was last updated on 2009-11-27.


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