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Costly information acquisition. Better to toss a coin?

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  • Matteo Triossiv

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Abstract

Citizens have little and uneven levels of political knowledge, consistently with the rational ignorance hypothesis. The paper presents a strategic model of common value elections with endogenous information acquisition accounting for these facts. It proves, that contrary to the most optimistic positions about direct democracy, majoritarian elections can fail to aggregate information, when voters have heterogeneous skills. Informational inefficiencies can be partially corrected by improving the skills of the electorate as the population increase or by limiting participation to most competent citizens. The first interpretation is consistent with Rousseau view that an educated citizenry is necessary for a well functioning democracy. The second interpretation provides rational foundations for an epistocratic form of government. JEL Classification Numbers: C72, D72, D82. Keywords: Costly Information Acquisition, Condorcet Jury Theorem.

Suggested Citation

  • Matteo Triossiv, 2010. "Costly information acquisition. Better to toss a coin?," Documentos de Trabajo 267, Centro de Economía Aplicada, Universidad de Chile.
  • Handle: RePEc:edj:ceauch:267
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    File URL: http://www.dii.uchile.cl/~cea/sitedev/cea/www/download.php?file=documentos_trabajo/ASOCFILE120100127120554.pdf
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    References listed on IDEAS

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    3. Myerson, Roger B., 1998. "Extended Poisson Games and the Condorcet Jury Theorem," Games and Economic Behavior, Elsevier, vol. 25(1), pages 111-131, October.
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    6. Martinelli, Cesar, 2006. "Would rational voters acquire costly information?," Journal of Economic Theory, Elsevier, vol. 129(1), pages 225-251, July.
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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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