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Speed and quality of collective decision making: Incentives for information provision

  • Grüner, Hans Peter
  • Schulte, Elisabeth

Abstract We study a one-shot information aggregation problem in which agents have to provide effort in order to understand the information they are supposed to process. Agents have a common interest in reaching a good decision but suffer from an individual cost of providing effort. Showing that any problem which is incentive compatible for a single information processor is incentive compatible for a decentralized organization, but not vice versa, we derive a new rationale for decentralized information processing. For a class of problems, the fastest organization - the reduced tree proposed by Radner (1993) - yields also the best incentives for information processing.

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Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 76 (2010)
Issue (Month): 3 (December)
Pages: 734-747

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Handle: RePEc:eee:jeborg:v:76:y:2010:i:3:p:734-747
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