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Costly participation and heterogeneous preferences in informational committees

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  • Hongbin Cai

Abstract

Informational committees are groups of people who are designated to gather information. This article develops a simple model of committee size based on costly participation and preference heterogeneity. In a setting in which the information structure and policy preferences are both represented by normal random variables, I characterize an equilibrium under the mean decision rule and derive the optimal committee size. I show that when effort costs are sufficiently high, preference heterogeneity can provide members additional incentives to gather information, and thus the optimal committee size and the principal's expected payoff can increase in the heterogeneity of committee members' policy preferences. Copyright (c) 2009, RAND.

Suggested Citation

  • Hongbin Cai, 2009. "Costly participation and heterogeneous preferences in informational committees," RAND Journal of Economics, RAND Corporation, vol. 40(1), pages 173-189.
  • Handle: RePEc:bla:randje:v:40:y:2009:i:1:p:173-189
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    Cited by:

    1. Bikhchandani, Sushil, 2010. "Information acquisition and full surplus extraction," Journal of Economic Theory, Elsevier, vol. 145(6), pages 2282-2308, November.
    2. Arthur Campbell & Florian Ederer & Johannes Spinnewijn, 2014. "Delay and Deadlines: Freeriding and Information Revelation in Partnerships," American Economic Journal: Microeconomics, American Economic Association, pages 163-204.
    3. Rosar, Frank, 2015. "Continuous decisions by a committee: Median versus average mechanisms," Journal of Economic Theory, Elsevier, vol. 159(PA), pages 15-65.
    4. Johannes Spinnewijn & Florian Ederer & Arthur Campbell, 2011. "Information Search and Revelation in Groups," 2011 Meeting Papers 997, Society for Economic Dynamics.
    5. Dezsö Szalay & Ramon Arean, 2005. "Communicating with a Team of Experts," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 05.12, Université de Lausanne, Faculté des HEC, DEEP.
    6. Oliveros, Santiago, 2013. "Abstention, ideology and information acquisition," Journal of Economic Theory, Elsevier, vol. 148(3), pages 871-902.
    7. Paolo Balduzzi & Clara Graziano & Annalisa Luporini, 2014. "Voting in small committees," Journal of Economics, Springer, pages 69-95.
    8. Guha, Brishti, 2016. "Secret ballots and costly information gathering: the jury size problem revisited," MPRA Paper 73048, University Library of Munich, Germany.
    9. repec:rnp:ecopol:ep1716 is not listed on IDEAS
    10. repec:spr:jogath:v:46:y:2017:i:2:d:10.1007_s00182-016-0546-6 is not listed on IDEAS
    11. Guha, Brishti, 2017. "Should Jurors Deliberate?," MPRA Paper 79876, University Library of Munich, Germany.

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