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Premise-Based versus Outcome-Based Information Aggregation

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Abstract

A group of rational individuals with common interest need to select one of two outcomes. The optimal decision depends on whether certain premises or pieces of evidence are established as being true, and each member receives a noisy signal of the truth value of the relevant premises. Should the group reach a decision by voting whether each premise is true or false, or should they simply vote on the outcome? We show that for any nite number of individuals, the premise-based voting rule is more efficient in aggregating information than the outcome-based rule. However, generically, the gain from using the premise-based over the outcome-based rule can only be marginal when numerous individuals express independent opinions. Indeed, the outcome-based game is almost always asymptotically efficient.

Suggested Citation

  • Geoffroy de Clippel & Kfir Eliaz, 2012. "Premise-Based versus Outcome-Based Information Aggregation," Working Papers 2012-10, Brown University, Department of Economics.
  • Handle: RePEc:bro:econwp:2012-10
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    References listed on IDEAS

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    1. Dietrich, Franz & List, Christian, 2007. "Strategy-Proof Judgment Aggregation," Economics and Philosophy, Cambridge University Press, vol. 23(03), pages 269-300, November.
    2. repec:cup:apsrev:v:90:y:1996:i:01:p:34-45_20 is not listed on IDEAS
    3. repec:cup:apsrev:v:92:y:1998:i:02:p:413-418_21 is not listed on IDEAS
    4. Bozbay, İrem & Dietrich, Franz & Peters, Hans, 2014. "Judgment aggregation in search for the truth," Games and Economic Behavior, Elsevier, vol. 87(C), pages 571-590.
    5. Timothy Feddersen & Wolfgang Pesendorfer, 1997. "Voting Behavior and Information Aggregation in Elections with Private Information," Econometrica, Econometric Society, vol. 65(5), pages 1029-1058, September.
    6. Christian List, 2005. "The probability of inconsistencies in complex collective decisions," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 24(1), pages 3-32, May.
    7. David S. Ahn & Santiago Oliveros, 2012. "Combinatorial Voting," Econometrica, Econometric Society, vol. 80(1), pages 89-141, January.
    8. Brennan, Geoffrey, 2001. "Collective coherence?," International Review of Law and Economics, Elsevier, vol. 21(2), pages 197-211, June.
    9. Nicola Persico, 2004. "Committee Design with Endogenous Information," Review of Economic Studies, Oxford University Press, vol. 71(1), pages 165-191.
    10. repec:cup:apsrev:v:92:y:1998:i:01:p:23-35_20 is not listed on IDEAS
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    1. repec:aea:aejmic:v:9:y:2017:i:4:p:108-40 is not listed on IDEAS
    2. Ruth Ben-Yashar & Leif Danziger, 2014. "On the optimal composition of committees," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 43(4), pages 973-980, December.
    3. Dietrich, Franz, 2016. "Judgment aggregation and agenda manipulation," Games and Economic Behavior, Elsevier, vol. 95(C), pages 113-136.
    4. repec:esx:essedp:743 is not listed on IDEAS
    5. Ahn, David S. & Oliveros, Santiago, 2014. "The Condorcet Jur(ies) Theorem," Journal of Economic Theory, Elsevier, vol. 150(C), pages 841-851.
    6. Schoch, Daniel, 2015. "Game Form Representation for Judgement and Arrovian Aggregation," MPRA Paper 64311, University Library of Munich, Germany.
    7. Masaki Miyashita, 2017. "Binary Collective Choice with Multiple Premises," Discussion Paper Series DP2017-27, Research Institute for Economics & Business Administration, Kobe University.

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    Keywords

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    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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