This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Learning while voting: determinants of collective experimentation

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Bruno Strulovici () (Nuffield College, Oxford University)

Additional information is available for the following registered author(s):

Abstract

This paper analyzes collective decision making when individual preferences evolve through learning. Votes are affected by their anticipated effect on future preferences. The analysis is conducted in a two-arm bandit model with a safe alternative and a risky alternative whose payoff distribution, or “type”, varies across individuals and may be learned through experimentation. Society is shown to experiment less than any of its members would if he could dictate future decisions, and to be systematically biased against experimentation compared to the utilitarian optimum. Control sharing can even result in negative value of experimentation: society may shun a risky alternative even its expected payoff is higher than the safe one’s. Commitment to a fixed alternative can only increase efficiency if aggregate uncertainty is small enough. Even when types are independent, a positive news shock for anyone raises everyone’s incentive to experiment. Ex ante preference correlation or heterogeneity reduces these inefficiencies.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.nuffield.ox.ac.uk/economics/papers/2008/w8/VotEx%2008May30%202.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by Economics Group, Nuffield College, University of Oxford in its series Economics Papers with number 2008-W08.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 45 pages
Date of creation: 05 2008
Date of revision:
Handle: RePEc:nuf:econwp:0808

Contact details of provider:
Web page: http://www.nuff.ox.ac.uk/economics/

For technical questions regarding this item, or to correct its listing, contact: (Maxine Collett).

Related research
Keywords:

This paper has been announced in the following NEP Reports:

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.:
  1. Bergemann, Dirk & Hege, Ulrich, 2001. "The Financing of Innovation: Learning and Stopping," CEPR Discussion Papers 2763, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  2. Godfrey Keller & Sven Rady & Martin Cripps, 2005. "Strategic Experimentation with Exponential Bandits," Econometrica, Econometric Society, vol. 73(1), pages 39-68, 01. [Downloadable!] (restricted)
    Other versions:
  3. Patrick Bolton & Christopher Harris, 1999. "Strategic Experimentation," Econometrica, Econometric Society, vol. 67(2), pages 349-374, March.
  4. James Albrecht & Axel Anderson & Susan Vroman, 2007. "Search by Committee," IZA Discussion Papers 3137, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
    • James Albrecht & Axel Anderson & Susan Vroman, 2007. "Search by Committee," Working Papers gueconwpa~07-07-09, Georgetown University, Department of Economics. [Downloadable!]
  5. Kuran, Timur, 1988. "The tenacious past: Theories of personal and collective conservatism," Journal of Economic Behavior & Organization, Elsevier, vol. 10(2), pages 143-171, September. [Downloadable!] (restricted)
  6. Bergemann, Dirk & Hege, Ulrich, 1998. "Venture capital financing, moral hazard, and learning," Journal of Banking & Finance, Elsevier, vol. 22(6-8), pages 703-735, August. [Downloadable!] (restricted)
    Other versions:
  7. Fernandez, Raquel & Rodrik, Dani, 1991. "Resistance to Reform: Status Quo Bias in the Presence of Individual-Specific Uncertainty," American Economic Review, American Economic Association, vol. 81(5), pages 1146-55, December. [Downloadable!] (restricted)
  8. Philippe Jehiel & Oliver Compte, 2007. "Bargaining and Majority Rules: A Collective Search Perspective," Levine's Bibliography 843644000000000131, UCLA Department of Economics. [Downloadable!]
  9. David A. Malueg & Shunichi O. Tsutsui, 1997. "Dynamic R&D Competition with Learning," RAND Journal of Economics, The RAND Corporation, vol. 28(4), pages 751-772, Winter. [Downloadable!] (restricted)
  10. Leland, Hayne E, 1994. " Corporate Debt Value, Bond Covenants, and Optimal Capital Structure," Journal of Finance, American Finance Association, vol. 49(4), pages 1213-52, September. [Downloadable!] (restricted)
    Other versions:
  11. Matthias Messner & Mattias K. Polborn, 2008. "The Option to Wait in Collective Decisions," Working Papers 338, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University. [Downloadable!]
Full references

Statistics
Access and download statistics

Did you know? You too can volunteer with RePEc.

This page was last updated on 2009-11-1.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.