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Over-caution of large committees of experts

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  • Midjord, Rune
  • Rodríguez Barraquer, Tomás
  • Valasek, Justin
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    Abstract

    We provide an explanation for why committees may behave over-cautiously. A committee of experts makes a decision on a proposed innovation on behalf of 'society'. Each expert's signal about the innovation's quality is generated by the available evidence and the best practices of the experts' common discipline, which is only indirectly related to the true state of the world. In addition to a payoff linked to the adequateness of the committee's decision, each expert receives a disesteem payoff if he/she voted in favor of an ill-fated innovation. No matter how small the disesteem payoffs are, information aggregation fails in large committees: under any majority rule, the committee rejects the innovation almost surely. -- Wir bieten eine Erklärung für die Frage an, warum Gremien unter bestimmten Umständen übervorsichtig agieren. Ein Expertengremium entscheidet stellvertretend für 'die Gesellschaft' über eine ihm vorgeschlagene Innovation. Die Bewertung der Qualität dieser Innovation durch jeden Experten erfolgt auf der Grundlage dessen, was in der gemeinsamen Disziplin als allgemein evident und als 'best practice' angesehen wird. Beides korreliert jedoch nur indirekt mit der tatsächlichen Qualität der Innovation. Neben der Entlohnung, die von der Qualität der Entscheidung des Komitees abhängt, enthält der Nutzen eines jeden Experten eine negative Komponente, z. B. in Form von Geringschätzung, falls er / sie für eine erfolglose Innovation votiert hat. Dabei zeigt sich, dass in großen Gremien das Aggregieren von Informationen scheitert, egal wie klein die negative Nutzenkomponente sein mag: unter jeder beliebigen Mehrheitsregel lehnt das Gremium die Innovation mit an Sicherheit grenzender Wahrscheinlichkeit ab.

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    Bibliographic Info

    Paper provided by Social Science Research Center Berlin (WZB) in its series Discussion Papers, Research Unit: Economics of Change with number SP II 2013-313.

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    Date of creation: 2013
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    Handle: RePEc:zbw:wzbeoc:spii2013313

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    Keywords: Committees; Information aggregation; Disesteem payoffs;

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    1. Li Hao & Wing Suen, 2009. "Viewpoint: Decision-making in committees," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 42(2), pages 359-392, May.
    2. Ellingsen, Tore & Johannesson, Magnus, 2006. "Pride and Prejudice: The Human Side of Incentive Theory," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5768, C.E.P.R. Discussion Papers.
    3. John Morgan & Felix Várdy, 2012. "Mixed Motives and the Optimal Size of Voting Bodies," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 120(5), pages 986 - 1026.
    4. Gilat Levy, 2007. "Decision Making in Committees: Transparency, Reputation, and Voting Rules," American Economic Review, American Economic Association, American Economic Association, vol. 97(1), pages 150-168, March.
    5. Kiel, Alexandra & Gerling, Kerstin & Schulte, Elisabeth & Grüner, Hans Peter, 2003. "Information acquisition and decision making in committees: a survey," Working Paper Series, European Central Bank 0256, European Central Bank.
    6. Callander, Steven, 2008. "Majority rule when voters like to win," Games and Economic Behavior, Elsevier, Elsevier, vol. 64(2), pages 393-420, November.
    7. Brennan, Geoffrey & Pettit, Philip, 2004. "The Economy of Esteem: An Essay on Civil and Political Society," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780199246489, October.
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