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Voting with Endogenous Information Acquisition: Theory and Evidence

Author

Listed:
  • Sourav Bhattacharya

    (Department of Economics, Royal Holloway, University of London)

  • John Duffy

    (Department of Economics, University of California-Irvine)

  • Sun-Tak Kim

    (Department of Economics, National Taiwan University)

Abstract

The standard model of jury or committee voting, with costless, exogenously given and noisy but informative signals regarding the true state of the world, predicts that the efficiency of group decision-making increases unambiguously with the group size. However, once signal acquisition is made a costly and endogenous decision, there are important free-riding considerations that counterbalance the information aggregation effect. If the cost of acquiring information is fixed, then rational voters have disincentives to purchase information as the group size becomes larger since the impact of their vote becomes smaller. In this paper we investigate the extent to which human subjects recognize this trade-off between information aggregation and free-riding in a laboratory experiment where we vary the group size, the cost of information acquisition and the precision of signals. We find that in most of the settings we study, free-riding incentives are weak as there is a pronounced tendency for subjects to over-acquire information relative to equilibrium predictions and we offer several possible explanations for this finding.

Suggested Citation

  • Sourav Bhattacharya & John Duffy & Sun-Tak Kim, 2015. "Voting with Endogenous Information Acquisition: Theory and Evidence," Working Papers 151602, University of California-Irvine, Department of Economics.
    • Handle: RePEc:irv:wpaper:151602
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    References listed on IDEAS

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    Cited by:

    1. Yaron Azrieli, 2018. "The price of ‘one person, one vote’," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 50(2), pages 353-385, February.
    2. Mechtenberg, Lydia & Tyran, Jean-Robert, 2019. "Voter motivation and the quality of democratic choice," Games and Economic Behavior, Elsevier, vol. 116(C), pages 241-259.
    3. Kawamura, Kohei & Vlaseros, Vasileios, 2017. "Expert information and majority decisions," Journal of Public Economics, Elsevier, vol. 147(C), pages 77-88.

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    More about this item

    Keywords

    Voting; Condorcet jury model; Information aggregation; Endogenous information acquisition; Experimental economics;
    All these keywords.

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

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