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Is Diversity in Capabilities Desirable When Adding Decision Makers?

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  • BEN-YASHAR, Ruth
  • NITZAN, Shmuel

Abstract

When the benefit of making a correct decision is sufficiently high, even a slight increase in the probability of making such a decision justifies an increase in the number of decision makers. Applying a standard uncertain dichotomous choice benchmark setting, this study focuses on the relative desirability of two alternatives: adding individuals with capabilities identical to the existing ones and adding identical individuals with mean-preserving capabilities that depend on the states of nature. Our main result establishes that when the group applies the simple majority rule, variability in the capabilities of the new decision makers under the two states of nature, which is commonly observed in various decision-making settings, is less desirable in terms of the probability of making the correct decision.

Suggested Citation

  • BEN-YASHAR, Ruth & NITZAN, Shmuel, 2016. "Is Diversity in Capabilities Desirable When Adding Decision Makers?," Discussion paper series HIAS-E-21, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
  • Handle: RePEc:hit:hiasdp:hias-e-21
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    File URL: http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/27755/3/070_hiasDP-E-21.pdf
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    References listed on IDEAS

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    1. repec:cup:apsrev:v:90:y:1996:i:01:p:34-45_20 is not listed on IDEAS
    2. Ben-Yashar, Ruth C & Nitzan, Shmuel I, 1997. "The Optimal Decision Rule for Fixed-Size Committees in Dichotomous Choice Situations: The General Result," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(1), pages 175-186, February.
    3. Ladha, Krishna K., 1995. "Information pooling through majority-rule voting: Condorcet's jury theorem with correlated votes," Journal of Economic Behavior & Organization, Elsevier, vol. 26(3), pages 353-372, May.
    4. Ben-Yashar, Ruth & Danziger, Leif, 2011. "Symmetric and asymmetric committees," Journal of Mathematical Economics, Elsevier, vol. 47(4-5), pages 440-447.
    5. Ruth Ben-Yashar & Mor Zahavi, 2011. "The Condorcet jury theorem and extension of the franchise with rationally ignorant voters," Public Choice, Springer, vol. 148(3), pages 435-443, September.
    6. Ruth Ben-Yashar & Igal Milchtaich, 2007. "First and second best voting rules in committees," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 29(3), pages 453-486, October.
    7. Ruth Ben-Yashar, 2014. "The generalized homogeneity assumption and the Condorcet jury theorem," Theory and Decision, Springer, vol. 77(2), pages 237-241, August.
    8. Raaj Kumar Sah, 1991. "Fallibility in Human Organizations and Political Systems," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 67-88, Spring.
    9. Franz Dietrich & Christian List, 2013. "Propositionwise judgment aggregation: the general case," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 40(4), pages 1067-1095, April.
    10. Sah, Raaj Kumar & Stiglitz, Joseph E, 1988. "Committees, Hierarchies and Polyarchies," Economic Journal, Royal Economic Society, vol. 98(391), pages 451-470, June.
    11. 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.
    12. Nitzan, Shmuel & Paroush, Jacob, 1982. "Optimal Decision Rules in Uncertain Dichotomous Choice Situations," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 23(2), pages 289-297, June.
    13. Eyal Baharad & Ruth Ben-Yashar, 2009. "The robustness of the optimal weighted majority rule to probability distortion," Public Choice, Springer, vol. 139(1), pages 53-59, April.
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    More about this item

    Keywords

    decisional capabilities; group extension; asymmetry; homogeneity; diversity; mean preservation;

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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