Costly information acquisition. Better to toss a coin?
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.
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- 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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- César Martinelli, 2005. "Rational Ignorance and Voting Behavior," Levine's Bibliography 784828000000000461, UCLA Department of Economics.
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- Daniel Berend & Jacob Paroush, 1998. "When is Condorcet's Jury Theorem valid?," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 15(4), pages 481-488.
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- Nicola Persico, 2004. "Committee Design with Endogenous Information," Review of Economic Studies, Oxford University Press, vol. 71(1), pages 165-191.
- Mandler, Michael, 2012. "The fragility of information aggregation in large elections," Games and Economic Behavior, Elsevier, vol. 74(1), pages 257-268.
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- Wittman, Donald, 1989. "Why Democracies Produce Efficient Results," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1395-1424, December. Full references (including those not matched with items on IDEAS)
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