IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Deliberative Democracy or Market Democracy: Designing Institutions to Aggregate Preferences and Information

  • Meirowitz, Adam

    (Princeton U)

Registered author(s):

    I consider the design of policy making institutions to aggregate preferences and information. The mechanism design approach makes it possible to consider a large set of institutions or game forms in which participants take observable actions prior to voting. A pervasive incentive problem is found; participants that expect to have the minority preference type will have an incentive to misrepresent their information. Consequentially, if some policy relevant information is observed by fewer than three individual participants and ideological types are not highly correlated no institution can fully aggregate the information and preferences without distributing transfers. Contrary to conventional wisdom, diversity may hurt deliberation as the incentives for information transmission are worse in groups with heterogenous sources of information or low levels of ideological correlation. Institutions that distribute transfers conditional on either the validity of agent reports of facts (like information markets), or the frequency of each type of report (like clubs) can truthfully implement the full information majority rule core policy. Overall, expectations of full information and preference aggregation with strategic participants require either strong correlation of preferences, the presence of external interests to structure incentives or information structures in which each piece of information is observed by several participants.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://weblamp.princeton.edu/rppe/files/meiro305.pdf
    Our checks indicate that this address may not be valid because: 500 Can't connect to weblamp.princeton.edu:80 (Bad hostname). If this is indeed the case, please notify ()


    Download Restriction: no

    Paper provided by Princeton University, Research Program in Political Economy in its series Papers with number 03-28-2005.

    as
    in new window

    Length:
    Date of creation: Mar 2005
    Date of revision:
    Handle: RePEc:ecl:prirpe:03-28-2005
    Contact details of provider: Web page: http://weblamp.princeton.edu/rppe/papers/papers.php

    More information through EDIRC

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as in new window
    1. Dasgupta, Partha S & Hammond, Peter J & Maskin, Eric S, 1979. "The Implementation of Social Choice Rules: Some General Results on Incentive Compatibility," Review of Economic Studies, Wiley Blackwell, vol. 46(2), pages 185-216, April.
    2. John Duggan & Cesar Martinelli, 1998. "A Bayesian Model of Voting in Juries," Wallis Working Papers WP14, University of Rochester - Wallis Institute of Political Economy.
    3. James Peck & Matthew O. Jackson, 1999. "Asymmetric information in a competitive market game: Reexamining the implications of rational expectations," Economic Theory, Springer, vol. 13(3), pages 603-628.
    4. Pradeep Dubey & John Geanakoplos & Martin Shubik, 1982. "Revelation of Information in Strategic Market Games: A Critique of Rational Expectations," Cowles Foundation Discussion Papers 634R, Cowles Foundation for Research in Economics, Yale University, revised Nov 1985.
    5. Shapley, Lloyd S & Shubik, Martin, 1977. "Trade Using One Commodity as a Means of Payment," Journal of Political Economy, University of Chicago Press, vol. 85(5), pages 937-68, October.
    6. Dino Gerardi & Leeat Yariv, 2003. "Putting Your Ballot Where you Mouth Is: An Analysis of Collective Choice," Levine's Working Paper Archive 506439000000000280, David K. Levine.
    7. Wolfers, Justin & Zitzewitz, Eric, 2004. "Prediction Markets," Research Papers 1854, Stanford University, Graduate School of Business.
    8. Postlewaite, Andrew & Schmeidler, David, 1986. "Implementation in differential information economies," Journal of Economic Theory, Elsevier, vol. 39(1), pages 14-33, June.
    9. Roger B. Myerson, 1977. "Incentive Compatability and the Bargaining Problem," Discussion Papers 284, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    10. Timothy Feddersen & Wolfgang Pesendorfer, 1996. "Convicting the Innocent: The Inferiority of Unanimous Jury Verdicts," Discussion Papers 1170, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    11. Palfrey, Thomas R & Srivastava, Sanjay, 1987. "On Bayesian Implementable Allocations," Review of Economic Studies, Wiley Blackwell, vol. 54(2), pages 193-208, April.
    12. Green, Jerry & Laffont, Jean-Jacques, 1977. "Characterization of Satisfactory Mechanisms for the Revelation of Preferences for Public Goods," Econometrica, Econometric Society, vol. 45(2), pages 427-38, March.
    13. repec:reg:rpubli:259 is not listed on IDEAS
    14. Timothy Feddersen & Wolfgang Pesendorfer, 1997. "Voting Behavior and Information Aggregation in Elections With Private Information," Levine's Working Paper Archive 1560, David K. Levine.
    15. Lipman Barton L. & Seppi Duane J., 1995. "Robust Inference in Communication Games with Partial Provability," Journal of Economic Theory, Elsevier, vol. 66(2), pages 370-405, August.
    16. Dino Gerardi & Leeat Yariv, 2003. "Putting Your Ballot Where Your Mouth Is: An Analysis of Collective Choice with Communication," UCLA Economics Working Papers 827, UCLA Department of Economics.
    17. Palfrey, Thomas R & Srivastava, Sanjay, 1989. "Mechanism Design with Incomplete Information: A Solution to the Implementation Problem," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 668-91, June.
    18. Myerson, Roger B., 1982. "Optimal coordination mechanisms in generalized principal-agent problems," Journal of Mathematical Economics, Elsevier, vol. 10(1), pages 67-81, June.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:ecl:prirpe:03-28-2005. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.