A Generalized Condorcet Jury Theorem with Two Independent Probabilities of Error
AbstractThe Condorcet Jury Theorem is derived from the implicit assumption that jury members only commit one type of error. If the probability of this error is smaller than 0.5, then group decisions are better than those of individual members. In binary decision situations, however, two types of error may occur, the probabilities of which are independent of each other. Taking this into account leads to a generalization of the theorem. Under this generalization, situations exists in which the probability of error is greater than 0.5 but the jury decision generates a higher expected welfare than an individual decision. Conversely, even if the probability of error is lower than 0.5 it is possible that individual decisions are superior.
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Bibliographic InfoPaper provided by Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung) in its series MAGKS Papers on Economics with number 201011.
Length: 41 pages
Date of creation: 2010
Date of revision:
Group decisions; judicial; imperfect decision-making;
Find related papers by JEL classification:
- D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
- K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-04-11 (All new papers)
- NEP-CDM-2010-04-11 (Collective Decision-Making)
- NEP-UPT-2010-04-11 (Utility Models & Prospect Theory)
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- Enriqueta Aragonés & Dimitrios Xefteris, 2011.
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