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Speed and Quality of Collective Decision Making: Incentives for Information Provision

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  • Hans Peter Grüner

    (University of Mannheim and CEPR - University of Mannheim and CEPR)

Abstract

We study a one-shot information aggregation problem in which agents have to provide e®ort in order to understand the information they are supposed to process. Agents have a common interest in reaching a good decision but suffer from an individual cost of providing eff®ort. Showing that any problem which is incentive compatible for a single information processor is incentive compatible for a decentralized organization, but not vice versa, we derive a new rationale for decentralized information processing. For a class of problems, the fastest organization--the reduced tree proposed by Radner (1993) --yields also the best incentives for information processing.

Suggested Citation

  • Hans Peter Grüner, 2010. "Speed and Quality of Collective Decision Making: Incentives for Information Provision," Post-Print hal-00911831, HAL.
  • Handle: RePEc:hal:journl:hal-00911831
    DOI: 10.1016/j.jebo.2010.08.013
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00911831
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    File URL: https://hal.archives-ouvertes.fr/hal-00911831/document
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    References listed on IDEAS

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