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Aggregation of Expert Opinions

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Abstract

Conflicts of interest arise between a decision maker and agents who have information pertinent to the problem because of differences in their preferences over outcomes. We show how the decision maker can extract the information by distorting the decisions that will be taken, and show that only slight distortions will be necessary when agents are "informationally small." We further show that as the number of informed agents becomes large the necessary distortion goes to zero. We argue that the particular mechanisms analyzed are substantially less demanding informationally than those typically employed in implementation and virtual implementation. In particular, the equilibria we analyze are "conditionally" dominant strategy in a precise sense. Further, the mechanisms are immune to manipulation by small groups of agents.

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  • Dino Gerardi & Richard McLean & Andrew Postlewaite, 2005. "Aggregation of Expert Opinions," Cowles Foundation Discussion Papers 1503, Cowles Foundation for Research in Economics, Yale University.
  • Handle: RePEc:cwl:cwldpp:1503
    Note: CFP 1239.
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    References listed on IDEAS

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    1. Richard McLean & Andrew Postlewaite, 2002. "Informational Size and Incentive Compatibility," Econometrica, Econometric Society, vol. 70(6), pages 2421-2453, November.
    2. Battaglini Marco, 2004. "Policy Advice with Imperfectly Informed Experts," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 4(1), pages 1-34, April.
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    5. Serrano, Roberto & Vohra, Rajiv, 2005. "A characterization of virtual Bayesian implementation," Games and Economic Behavior, Elsevier, vol. 50(2), pages 312-331, February.
    6. Matsushima Hitoshi, 1993. "Bayesian Monotonicity with Side Payments," Journal of Economic Theory, Elsevier, vol. 59(1), pages 107-121, February.
    7. Postlewaite, Andrew & McLean, Richard, 2015. "Implementation with interdependent valuations," Theoretical Economics, Econometric Society, vol. 10(3), September.
    8. 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.
    9. Austen-Smith David, 1993. "Interested Experts and Policy Advice: Multiple Referrals under Open Rule," Games and Economic Behavior, Elsevier, vol. 5(1), pages 3-43, January.
    10. Matsushima, Hitoshi, 1988. "A new approach to the implementation problem," Journal of Economic Theory, Elsevier, vol. 45(1), pages 128-144, June.
    11. Matthew O. Jackson, 2001. "A crash course in implementation theory," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 18(4), pages 655-708.
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    14. Marco Ottaviani & Peter Norman Sørensen, 2006. "Reputational cheap talk," RAND Journal of Economics, RAND Corporation, vol. 37(1), pages 155-175, March.
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    Citations

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    Cited by:

    1. Tilman Klumpp, 2007. "Communication in financial markets with several informed traders," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 33(3), pages 437-456, December.
    2. Jackson, Matthew O. & Tan, Xu, 2013. "Deliberation, disclosure of information, and voting," Journal of Economic Theory, Elsevier, vol. 148(1), pages 2-30.
    3. Casamatta, Catherine & Haritchabalet, Carole, 2007. "Experience, screening and syndication in venture capital investments," Journal of Financial Intermediation, Elsevier, vol. 16(3), pages 368-398, July.
    4. Irene Valsecchi, 2013. "The expert problem: a survey," Economics of Governance, Springer, vol. 14(4), pages 303-331, November.
    5. Elisabeth Schulte, 2010. "Information aggregation and preference heterogeneity in committees," Theory and Decision, Springer, vol. 69(1), pages 97-118, July.
    6. Inga Deimen & Felix Ketelaar & Mark T. Le Quement, 2013. "Consistency and Communication in Committees," Bonn Econ Discussion Papers bgse02_2013, University of Bonn, Germany.
    7. M. Ferrara & F. Lamperti & R. Mavilia, 2016. "Looking for best performers: a pilot study towards the evaluation of science parks," Scientometrics, Springer;Akadémiai Kiadó, vol. 106(2), pages 717-750, February.
    8. Tombazos, Christis G. & Dobra, Matthew, 2014. "Formulating research policy on expert advice," European Economic Review, Elsevier, vol. 72(C), pages 166-181.
    9. Pablo Amorós, 2017. "The problem of aggregating experts?' opinions to select the winner of a competition," Working Papers 2017-04, Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center.
    10. Elisabeth Schulte, 2012. "Communication in committees: who should listen?," Public Choice, Springer, vol. 150(1), pages 97-117, January.
    11. 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.
    12. Corchón, Luis C., 2008. "The theory of implementation : what did we learn?," UC3M Working papers. Economics we081207, Universidad Carlos III de Madrid. Departamento de Economía.
    13. Deimen, Inga & Ketelaar, Felix & Le Quement, Mark T., 2015. "Consistency and communication in committees," Journal of Economic Theory, Elsevier, vol. 160(C), pages 24-35.
    14. Torun Dewan & Andrea Galeotti & Christian Ghiglino & Francesco Squintani, 2015. "Information aggregation and optimal structure of the executive," LSE Research Online Documents on Economics 59632, London School of Economics and Political Science, LSE Library.

    More about this item

    Keywords

    Information Aggregation; Mechanism Design; Incomplete Information;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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