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Public Disagreement

  • Rajiv Sethi
  • Muhamet Yildiz

We develop a model of deliberation under heterogeneous beliefs and incomplete information, and use it to explore questions concerning the aggregation of distributed information and the consequences of social integration. We show that when priors are correlated, all private information is eventually aggregated and public beliefs are identical to those arising under observable priors. When priors are independently distributed, however, some private information is never revealed, and communication breaks down entirely in large groups. Interpreting integration in terms of the observability of priors, we show how increases in social integration lead to less divergent public beliefs on average. (JEL D82, D83, Z13)

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Article provided by American Economic Association in its journal American Economic Journal: Microeconomics.

Volume (Year): 4 (2012)
Issue (Month): 3 (August)
Pages: 57-95

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Handle: RePEc:aea:aejmic:v:4:y:2012:i:3:p:57-95
Note: DOI: 10.1257/mic.4.3.57
Contact details of provider: Web page: https://www.aeaweb.org/aej-micro
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References listed on IDEAS
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  1. Andrea Wilson, 2003. "Bounded Memory and Biases in Information Processing," NajEcon Working Paper Reviews 234936000000000070, www.najecon.org.
  2. Yeon-Koo Che & Navin Kartik, 2009. "Opinions as Incentives," Journal of Political Economy, University of Chicago Press, vol. 117(5), pages 815-860, October.
  3. Eric J. Van den Steen, 2009. "Culture Clash: The Costs and Benefits of Homogeneity," Harvard Business School Working Papers 10-003, Harvard Business School.
  4. John Geanakoplos & Heracles M. Polemarchakis, 1982. "We Can't Disagree Forever," Cowles Foundation Discussion Papers 639, Cowles Foundation for Research in Economics, Yale University.
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  16. Sergio Currarini & Paolo Pin & Matthew O. Jackson, 2007. "An Economic Model of Friendship: Homophily, Minorities and Segregation," Working Papers 2007_20, Department of Economics, University of Venice "Ca' Foscari".
  17. Harrington, Joseph E, Jr, 1993. "Economic Policy, Economic Performance, and Elections," American Economic Review, American Economic Association, vol. 83(1), pages 27-42, March.
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  19. Geanakoplos, John D. & Polemarchakis, Heraklis M., 1982. "We can't disagree forever," Journal of Economic Theory, Elsevier, vol. 28(1), pages 192-200, October.
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