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Conflicts and Common Interests in Committees

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Author Info
Hao Li
Sherwin Rosen
Wing Suen

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Abstract

Committees improve decisions by pooling independent information of members, but promote manipulation, obfuscation, and exaggeration of private evidence when members have conflicting preferences. We study how self-interest mediates these conflicting forces. When members' preferences differ, no person ever submits a report that allows perfect inference of his private information. Instead, equilibrium strategies are many-to-one mappings that transform continuous data into ordered ranks: voting procedures are the equilibrium methods of achieving a consensus in committees. Voting necessarily coarsens the transmission of information among members, but is necessary to control conflicts of interest. The degree of coarseness of the equilibrium voting procedure is determined by the extent of conflicting preferences. Though self-interests necessarily reduce the efficient use of information in committees, real information sharing occurs nonetheless. Committees make better decisions on behalf of the average' (Pareto weighted) member than would any individual on the basis of own information. Committees are viable, though imperfect ways of making decisions when information is dispersed among members.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7158.

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Date of creation: Jun 1999
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Handle: RePEc:nbr:nberwo:7158

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D00 - Microeconomics - - General - - - General
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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Turner, Matthew & Weninger, Quinn, 2004. "Meetings with costly participation: an empirical analysis," Staff General Research Papers 11464, Iowa State University, Department of Economics.
    Other versions:
  2. Ettore Damiano & Hao Li & Wing Suen, 2008. "Delay in Strategic Information Aggregation," Working Papers tecipa-311, University of Toronto, Department of Economics. [Downloadable!]
  3. Sourav Bhattacharya, 2006. "Preference Monotonicity and Information Aggregation in Elections," Working Papers 325, University of Pittsburgh, Department of Economics, revised Jun 2007. [Downloadable!]
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  5. Bauke Visser & Otto H. Swank, 2005. "On Committees of Experts," Tinbergen Institute Discussion Papers 05-028/1, Tinbergen Institute. [Downloadable!]
    Other versions:
  6. Ruth Ben-Yashar & Igal Milchtaich, 2007. "First and second best voting rules in committees," Social Choice and Welfare, Springer, vol. 29(3), pages 453-486, October. [Downloadable!] (restricted)
  7. Sibert, Anne, 2006. "Central Banking by Committee," CEPR Discussion Papers 5626, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  8. Klaas J. Beniers & Otto H. Swank, 2003. "On the Composition of Committees," Tinbergen Institute Discussion Papers 03-006/1, Tinbergen Institute. [Downloadable!]
    Other versions:
  9. Robin Boadway & Motohiro Sato, 2006. "Bureaucratic Advice and Political Governance," Working Papers 2006-03, University of Kentucky, Institute for Federalism and Intergovernmental Relations. [Downloadable!]
    Other versions:
  10. 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:
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  18. Eyal Baharad & Shmuel Nitzan, 2007. "The Costs of Implementing the Majority Principle: The Golden Voting Rule," Economic Theory, Springer, vol. 31(1), pages 69-84, April. [Downloadable!] (restricted)
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  20. Job Swank & Otto Swank & Bauke Visser, 2006. "Transparency and Pre-meetings," Tinbergen Institute Discussion Papers 06-051/1, Tinbergen Institute. [Downloadable!]
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