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Aggregation of Expert Opinions

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Author Info

  • Dino Gerardi

    ()
    (Department of Economics, Yale University)

  • Richard McLean

    ()
    (Department of Economics, Rutgers University)

  • Andrew Postlewaite

    ()
    (Department of Economics, University of Pennsylvania)

Abstract

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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Bibliographic Info

Paper provided by Penn Institute for Economic Research, Department of Economics, University of Pennsylvania in its series PIER Working Paper Archive with number 05-016.

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Length: 41 pages
Date of creation: 01 Apr 2005
Date of revision:
Handle: RePEc:pen:papers:05-016

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Keywords: Information aggregation; Asymmetric information; Cheap talk; Experts;

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References

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  1. Battaglini Marco, 2004. "Policy Advice with Imperfectly Informed Experts," The B.E. Journal of Theoretical Economics, De Gruyter, De Gruyter, vol. 4(1), pages 1-34, April.
  2. Austen-Smith David, 1993. "Interested Experts and Policy Advice: Multiple Referrals under Open Rule," Games and Economic Behavior, Elsevier, Elsevier, vol. 5(1), pages 3-43, January.
  3. Richard McLean & Andrew Postlewaite, 2002. "Informational Size and Incentive Compatibility," Econometrica, Econometric Society, Econometric Society, vol. 70(6), pages 2421-2453, November.
  4. Richard P. McLean & Andrew Postlewaite, 2006. "Implementation with Interdependent Valuations," PIER Working Paper Archive, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania 06-007, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  5. Matthew O. Jackson, 2001. "A crash course in implementation theory," Social Choice and Welfare, Springer, Springer, vol. 18(4), pages 655-708.
  6. Abreu, Dilip & Sen, Arunava, 1991. "Virtual Implementation in Nash Equilibrium," Econometrica, Econometric Society, Econometric Society, vol. 59(4), pages 997-1021, July.
  7. Marco Ottaviani & Peter Norman Sørensen, 2006. "Reputational cheap talk," RAND Journal of Economics, RAND Corporation, RAND Corporation, vol. 37(1), pages 155-175, 03.
  8. RICHARD McLEAN & ANDREW POSTLEWAITE, 2004. "Informational Size and Efficient Auctions," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 71, pages 809-827, 07.
  9. V. Crawford & J. Sobel, 2010. "Strategic Information Transmission," Levine's Working Paper Archive 544, David K. Levine.
  10. Cremer, Jacques & McLean, Richard P, 1985. "Optimal Selling Strategies under Uncertainty for a Discriminating Monopolist When Demands Are Interdependent," Econometrica, Econometric Society, Econometric Society, vol. 53(2), pages 345-61, March.
  11. Marco Battaglini, 2000. "Multiple Referrals and Multidimensional Cheap Talk," Econometric Society World Congress 2000 Contributed Papers, Econometric Society 1557, Econometric Society.
  12. Roberto Serrano & Rajiv Vohra, 2002. "A Characterization of Virtual Bayesian Implementation," Economics Working Papers, Institute for Advanced Study, School of Social Science 0028, Institute for Advanced Study, School of Social Science.
  13. Wolinsky, Asher, 2002. "Eliciting information from multiple experts," Games and Economic Behavior, Elsevier, Elsevier, vol. 41(1), pages 141-160, October.
  14. Timothy Feddersen & Wolfgang Pesendorfer, 1996. "Convicting the Innocent: The Inferiority of Unanimous Jury Verdicts," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 1170, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  15. Postlewaite, Andrew & Schmeidler, David, 1986. "Implementation in differential information economies," Journal of Economic Theory, Elsevier, Elsevier, vol. 39(1), pages 14-33, June.
  16. Timothy Feddersen & Wolfgang Pesendorfer, 1997. "Voting Behavior and Information Aggregation in Elections With Private Information," Levine's Working Paper Archive 1560, David K. Levine.
  17. Matsushima, Hitoshi, 1988. "A new approach to the implementation problem," Journal of Economic Theory, Elsevier, Elsevier, vol. 45(1), pages 128-144, June.
  18. Marco Ottaviani & Peter Sorensen, 1999. "Professional Advice," Game Theory and Information, EconWPA 9906003, EconWPA.
  19. Gul, Faruk & Postlewaite, Andrew, 1992. "Asymptotic Efficiency in Large Exchange Economies with Asymmetric Information," Econometrica, Econometric Society, Econometric Society, vol. 60(6), pages 1273-92, November.
  20. Matsushima Hitoshi, 1993. "Bayesian Monotonicity with Side Payments," Journal of Economic Theory, Elsevier, Elsevier, vol. 59(1), pages 107-121, February.
  21. John Duggan, 1997. "Virtual Bayesian Implementation," Econometrica, Econometric Society, Econometric Society, vol. 65(5), pages 1175-1200, September.
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Citations

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Cited by:
  1. Jackson, Matthew O. & Tan, Xu, 2013. "Deliberation, disclosure of information, and voting," Journal of Economic Theory, Elsevier, Elsevier, vol. 148(1), pages 2-30.
  2. Dezsö Szalay & Ramon Arean, 2005. "Communicating with a Team of Experts," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP), Université de Lausanne, Faculté des HEC, DEEP 05.12, Université de Lausanne, Faculté des HEC, DEEP.
  3. Casamatta, Catherine & Haritchabalet, Carole, 2007. "Experience, Screening and Syndication in Venture Capital Investments," IDEI Working Papers, Institut d'Économie Industrielle (IDEI), Toulouse 443, Institut d'Économie Industrielle (IDEI), Toulouse.
  4. Elisabeth Schulte, 2012. "Communication in committees: who should listen?," Public Choice, Springer, Springer, vol. 150(1), pages 97-117, January.
  5. Elisabeth Schulte, 2006. "Information Aggregation and Preference Heterogeneity in Committees," JEPS Working Papers, JEPS 06-003, JEPS.
  6. Inga Deimen & Felix Ketelaar & Mark T. Le Quement, 2013. "Consistency and Communication in Committees," Bonn Econ Discussion Papers, University of Bonn, Germany bgse02_2013, University of Bonn, Germany.
  7. Junichiro Ishida & Takashi Shimizu, 2009. "Cheap Talk with an Informed Receiver," ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 0746, Institute of Social and Economic Research, Osaka University.
  8. repec:reg:wpaper:426 is not listed on IDEAS
  9. Luis C. Corchon, 2007. "The theory of implementation : what did we learn?," Economics Working Papers we081207, Universidad Carlos III, Departamento de Economía.
  10. Tilman Klumpp, 2007. "Communication in financial markets with several informed traders," Economic Theory, Springer, Springer, vol. 33(3), pages 437-456, December.

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