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Aggregation of Expert Opinions

  • Dino Gerardi

    ()

    (Department of Economics, Yale University)

  • Richard McLean

    ()

    (Department of Economics, Rutgers University)

  • Andrew Postlewaite

    ()

    (Department of Economics, University of Pennsylvania)

Conflicts of interest arise between a decision maker and agents who have information pertinent to the problem because of differences in their preferences over outcomes. We show how the decision maker can extract the information by distorting the decisions that will be taken, and show that only slight distortions will be necessary when agents are informationally small. We further show that as the number of informed agents becomes large the necessary distortion goes to zero. We argue that the particular mechanisms analyzed are substantially less demanding informationally than those typically employed in implementation and virtual implementation. In particular, the equilibria we analyze are conditionally dominant strategy in a precise sense. Further, the mechanisms are immune to manipulation by small groups of agents.

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File URL: http://economics.sas.upenn.edu/system/files/working-papers/05-016.pdf
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Paper provided by Penn Institute for Economic Research, Department of Economics, University of Pennsylvania in its series PIER Working Paper Archive with number 05-016.

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Length: 41 pages
Date of creation: 01 Apr 2005
Date of revision:
Handle: RePEc:pen:papers:05-016
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  1. V. Crawford & J. Sobel, 2010. "Strategic Information Transmission," Levine's Working Paper Archive 544, David K. Levine.
  2. Richard McLean & Andrew Postlewaite, . "Informational Size and Incentive Compatibility," Penn CARESS Working Papers 7f6ff09d59945e06909ce4fa4, Penn Economics Department.
  3. Timothy Feddersen & Wolfgang Pesendorfer, 1997. "Voting Behavior and Information Aggregation in Elections With Private Information," Levine's Working Paper Archive 1560, David K. Levine.
  4. RICHARD McLEAN & ANDREW POSTLEWAITE, 2004. "Informational Size and Efficient Auctions," Review of Economic Studies, Wiley Blackwell, vol. 71, pages 809-827, 07.
  5. Cremer, Jacques & McLean, Richard P, 1985. "Optimal Selling Strategies under Uncertainty for a Discriminating Monopolist When Demands Are Interdependent," Econometrica, Econometric Society, vol. 53(2), pages 345-61, March.
  6. Battaglini Marco, 2004. "Policy Advice with Imperfectly Informed Experts," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 4(1), pages 1-34, April.
  7. Ottaviani, Marco & Sorensen, Peter Norman, 2006. "Professional advice," Journal of Economic Theory, Elsevier, vol. 126(1), pages 120-142, January.
  8. Serrano, Roberto & Vohra, Rajiv, 2005. "A characterization of virtual Bayesian implementation," Games and Economic Behavior, Elsevier, vol. 50(2), pages 312-331, February.
  9. Postlewaite, Andrew & McLean, Richard, 0. "Implementation with interdependent valuations," Theoretical Economics, Econometric Society.
  10. Matthew O. Jackson, 2001. "A crash course in implementation theory," Social Choice and Welfare, Springer, vol. 18(4), pages 655-708.
  11. Asher Wolinsky, 1999. "Eliciting Information From Multiple Experts," Discussion Papers 1277, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  12. Marco Battaglini, 1999. "Multiple Referrals and Multidimensional Cheap Talk," Discussion Papers 1295, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  13. Austen-Smith David, 1993. "Interested Experts and Policy Advice: Multiple Referrals under Open Rule," Games and Economic Behavior, Elsevier, vol. 5(1), pages 3-43, January.
  14. Gul, Faruk & Postlewaite, Andrew, 1992. "Asymptotic Efficiency in Large Exchange Economies with Asymmetric Information," Econometrica, Econometric Society, vol. 60(6), pages 1273-92, November.
  15. Matsushima Hitoshi, 1993. "Bayesian Monotonicity with Side Payments," Journal of Economic Theory, Elsevier, vol. 59(1), pages 107-121, February.
  16. John Duggan, 1997. "Virtual Bayesian Implementation," Econometrica, Econometric Society, vol. 65(5), pages 1175-1200, September.
  17. Postlewaite, Andrew & Schmeidler, David, 1986. "Implementation in differential information economies," Journal of Economic Theory, Elsevier, vol. 39(1), pages 14-33, June.
  18. Matsushima, Hitoshi, 1988. "A new approach to the implementation problem," Journal of Economic Theory, Elsevier, vol. 45(1), pages 128-144, June.
  19. Timothy Feddersen & Wolfgang Pesendorfer, 1996. "Convicting the Innocent: The Inferiority of Unanimous Jury Verdicts," Discussion Papers 1170, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  20. Abreu, Dilip & Sen, Arunava, 1991. "Virtual Implementation in Nash Equilibrium," Econometrica, Econometric Society, vol. 59(4), pages 997-1021, July.
  21. Marco Ottaviani & Peter Norman Sørensen, 2006. "Reputational cheap talk," RAND Journal of Economics, RAND Corporation, vol. 37(1), pages 155-175, 03.
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