Premise-Based versus Outcome-Based Information Aggregation
AbstractA group of rational individuals with common interest need to select one of two outcomes. The optimal decision depends on whether certain premises or pieces of evidence are established as being true, and each member receives a noisy signal of the truth value of the relevant premises. Should the group reach a decision by voting whether each premise is true or false, or should they simply vote on the outcome? We show that for any nite number of individuals, the premise-based voting rule is more efficient in aggregating information than the outcome-based rule. However, generically, the gain from using the premise-based over the outcome-based rule can only be marginal when numerous individuals express independent opinions. Indeed, the outcome-based game is almost always asymptotically efficient.
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Bibliographic InfoPaper provided by Brown University, Department of Economics in its series Working Papers with number 2012-10.
Date of creation: 2012
Date of revision:
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Postal: Department of Economics, Brown University, Providence, RI 02912
Other versions of this item:
- de Clippel, Geoffroy & Eliaz, Kfir, 2012. "Premise-Based versus Outcome-Based Information Aggregation," CEPR Discussion Papers, C.E.P.R. Discussion Papers 8733, C.E.P.R. Discussion Papers.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-03 (All new papers)
- NEP-CDM-2012-09-03 (Collective Decision-Making)
- NEP-MIC-2012-09-03 (Microeconomics)
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