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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.

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  • Hongbin Cai, 2009. "Costly participation and heterogeneous preferences in informational committees," RAND Journal of Economics, RAND Corporation, vol. 40(1), pages 173-189, March.
  • Handle: RePEc:bla:randje:v:40:y:2009:i:1:p:173-189
    DOI: 10.1111/j.1756-2171.2008.00060.x
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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. Chan, Jimmy & Gupta, Seher & Li, Fei & Wang, Yun, 2019. "Pivotal persuasion," Journal of Economic Theory, Elsevier, vol. 180(C), pages 178-202.
      • Jimmy Chan & Seher Gupta & Fei Li & Yun Wang, 2018. "Pivotal Persuasion," Working Papers 2018-11-03, Wang Yanan Institute for Studies in Economics (WISE), Xiamen University.
    3. Xu Tan & Quan Wen, 2020. "Information acquisition and voting with heterogeneous experts," RAND Journal of Economics, RAND Corporation, vol. 51(4), pages 1063-1092, December.
    4. Arthur Campbell & Florian Ederer & Johannes Spinnewijn, 2014. "Delay and Deadlines: Freeriding and Information Revelation in Partnerships," American Economic Journal: Microeconomics, American Economic Association, vol. 6(2), pages 163-204, May.
    5. Keiichi Morimoto, 2021. "Information Use and the Condorcet Jury Theorem," Mathematics, MDPI, vol. 9(10), pages 1-22, May.
    6. Campbell, Arthur & Ederer, Florian & Spinnewijn, Johannes, 2011. "Time to Decide: Information Search and Revelation in Groups," CEPR Discussion Papers 8531, C.E.P.R. Discussion Papers.
    7. Guha Brishti, 2020. "Pretrial Beliefs and Verdict Accuracy: Costly Juror Effort and Free Riding," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 20(2), pages 1-9, June.
    8. Rosar, Frank, 2015. "Continuous decisions by a committee: Median versus average mechanisms," Journal of Economic Theory, Elsevier, vol. 159(PA), pages 15-65.
    9. Johannes Spinnewijn & Florian Ederer & Arthur Campbell, 2011. "Information Search and Revelation in Groups," 2011 Meeting Papers 997, Society for Economic Dynamics.
    10. Dezsö Szalay & Ramon Arean, 2005. "Communicating with a Team of Experts," Cahiers de Recherches Economiques du Département d'économie 05.12, Université de Lausanne, Faculté des HEC, Département d’économie.
    11. Gersbach, Hans & Mamageishvili, Akaki & Tejada, Oriol, 2020. "Appointed Learning for the Common Good: Optimal Committee Size and Efficient Rewards," CEPR Discussion Papers 15311, C.E.P.R. Discussion Papers.
    12. Nikitas Konstantinidis, 2013. "Optimal committee design and political participation," Journal of Theoretical Politics, , vol. 25(4), pages 443-466, October.
    13. Xin Zhao, 2018. "Heterogeneity and Unanimity: Optimal Committees with Information Acquisition," Working Paper Series 52, Economics Discipline Group, UTS Business School, University of Technology, Sydney.
    14. Oliveros, Santiago, 2013. "Abstention, ideology and information acquisition," Journal of Economic Theory, Elsevier, vol. 148(3), pages 871-902.
    15. Paolo Balduzzi & Clara Graziano & Annalisa Luporini, 2014. "Voting in small committees," Journal of Economics, Springer, vol. 111(1), pages 69-95, February.
    16. Guha, Brishti, 2018. "Secret ballots and costly information gathering: The jury size problem revisited," International Review of Law and Economics, Elsevier, vol. 54(C), pages 58-67.
    17. Bhattacharya, Sourav & Goltsman, Maria & Mukherjee, Arijit, 2018. "On the optimality of diverse expert panels in persuasion games," Games and Economic Behavior, Elsevier, vol. 107(C), pages 345-363.
    18. Guha Brishti, 2020. "Should Jurors Deliberate?," Review of Law & Economics, De Gruyter, vol. 16(2), pages 1-27, July.
    19. Guha, Brishti, 2022. "Ambiguity aversion, group size, and deliberation: Costly information and decision accuracy," Journal of Economic Behavior & Organization, Elsevier, vol. 201(C), pages 115-133.
    20. Panova, Anna (Панова, Анна), 2017. "Decision Making Mechanisms at University [Механизмы Принятия Решений В Университете]," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 2, pages 132-151, April.
    21. Name Correa, Alvaro J. & Yildirim, Huseyin, 2021. "Biased experts, majority rule, and the optimal composition of committee," Games and Economic Behavior, Elsevier, vol. 127(C), pages 1-27.
    22. Jun Chen, 2021. "The Condorcet Jury Theorem with Information Acquisition," Games, MDPI, vol. 12(4), pages 1-33, October.
    23. Volker Hahn, 2017. "On the drawbacks of large committees," International Journal of Game Theory, Springer;Game Theory Society, vol. 46(2), pages 563-582, May.
    24. repec:pit:wpaper:516 is not listed on IDEAS
    25. Guha, Brishti, 2017. "Should Jurors Deliberate?," MPRA Paper 79876, University Library of Munich, Germany.

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