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Premise-Based versus Outcome-Based Information Aggregation

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Abstract

A 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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Paper provided by Brown University, Department of Economics in its series Working Papers with number 2012-10.

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Date of creation: 2012
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Handle: RePEc:bro:econwp:2012-10

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Postal: Department of Economics, Brown University, Providence, RI 02912

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  1. Christian List, 2005. "The probability of inconsistencies in complex collective decisions," Social Choice and Welfare, Springer, vol. 24(1), pages 3-32, 05.
  2. Timothy Feddersen & Wolfgang Pesendorfer, 1997. "Voting Behavior and Information Aggregation in Elections With Private Information," Levine's Working Paper Archive 1560, David K. Levine.
  3. Brennan, Geoffrey, 2001. "Collective coherence?," International Review of Law and Economics, Elsevier, vol. 21(2), pages 197-211, June.
  4. Franz Dietrich & Christian List, 2004. "Strategy-proof judgment aggregation," Public Economics 0404007, EconWPA, revised 25 Jul 2005.
  5. Nicola Persico, 2004. "Committee Design with Endogenous Information," Review of Economic Studies, Wiley Blackwell, vol. 71(1), pages 165-191, 01.
  6. Bozbay Irem & Dietrich Franz & Peters Hans, 2011. "Judgment aggregation in search for the truth," Research Memorandum 040, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
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Cited by:
  1. David S Ahn & Santiago Oliveros, 2010. "The Condorcet Jur(ies) Theorem," Levine's Working Paper Archive 661465000000000268, David K. Levine.

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