Conflicts of interest arise between a decision maker and agents who have information pertinent to the problem because of differences in their preferences over outcomes. We show how the decision maker can extract the information by distorting the decisions that will be taken, and show that only slight distortions will be necessary when agents are "informationally small." We further show that as the number of informed agents becomes large the necessary distortion goes to zero. We argue that the particular mechanisms analyzed are substantially less demanding informationally than those typically employed in implementation and virtual implementation. In particular, the equilibria we analyze are "conditionally" dominant strategy in a precise sense. Further, the mechanisms are immune to manipulation by small groups of agents.
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Length: 40 pages Date of creation: Apr 2005 Date of revision: Publication status: Published in Games and Economic Behavior (March 2009), 65(2): 339-371 Handle: RePEc:cwl:cwldpp:1503
Dino Gerardi & Richard McLean & Andrew Postlewaite, 2005.
"Aggregation of Expert Opinions,"
PIER Working Paper Archive
05-016, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
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Find related papers by JEL classification: C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information
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