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How Transparency Kills Information Aggregation : Theory and Experiment

Author

Listed:
  • Fehrler, Sebastian

    (University of Konstanz and IZA)

  • Hughes, Niall

    (Department of Economics, University of Warwick)

Abstract

We investigate the potential of transparency to influence committee decisionmaking.We present a model in which career concerned committee members receive private information of different type-dependent accuracy, deliberate and vote. We study three levels of transparency under which career concerns are predicted to affect behavior differently, and test the model’s key predictions in a laboratory experiment. The model’s predictions are largely borne out - transparency negatively affects information aggregation at the deliberation and voting stages, leading to sharply different committee error rates than under secrecy. This occurs despite subjects revealing more information under transparency than theory predicts.

Suggested Citation

  • Fehrler, Sebastian & Hughes, Niall, 2015. "How Transparency Kills Information Aggregation : Theory and Experiment," The Warwick Economics Research Paper Series (TWERPS) 1088, University of Warwick, Department of Economics.
  • Handle: RePEc:wrk:warwec:1088
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    References listed on IDEAS

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    1. repec:ulb:ulbeco:2013/136800 is not listed on IDEAS
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    3. Bouton, Laurent & Castanheira, Micael & Llorente-Saguer, Aniol, 2016. "Divided majority and information aggregation: Theory and experiment," Journal of Public Economics, Elsevier, vol. 134(C), pages 114-128.
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    8. Fox, Justin & Van Weelden, Richard, 2012. "Costly transparency," Journal of Public Economics, Elsevier, vol. 96(1), pages 142-150.
    9. Jacob K. Goeree & Leeat Yariv, 2011. "An Experimental Study of Collective Deliberation," Econometrica, Econometric Society, vol. 79(3), pages 893-921, May.
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    11. repec:pit:wpaper:492 is not listed on IDEAS
    12. Bhattacharya, Sourav & Duffy, John & Kim, Sun-Tak, 2014. "Compulsory versus voluntary voting: An experimental study," Games and Economic Behavior, Elsevier, vol. 84(C), pages 111-131.
    13. Bouton, Laurent & Castanheira, Micael & Llorente-Saguer, Aniol, 2016. "Divided majority and information aggregation: Theory and experiment," Journal of Public Economics, Elsevier, vol. 134(C), pages 114-128.
    14. Job Swank & Otto H. Swank & Bauke Visser, 2008. "How Committees of Experts Interact with the Outside World: Some Theory, and Evidence from the FOMC," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 478-486, 04-05.
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    Citations

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    Cited by:

    1. Breitmoser, Yves & Valasek, Justin, 2017. "A rationale for unanimity in committees," Discussion Papers, Research Unit: Economics of Change SP II 2017-308, WZB Berlin Social Science Center.
    2. repec:spr:joecth:v:66:y:2018:i:1:d:10.1007_s00199-017-1054-z is not listed on IDEAS
    3. S. Nageeb Ali & Roland Bénabou, 2016. "Image Versus Information: Changing Societal Norms and Optimal Privacy," NBER Working Papers 22203, National Bureau of Economic Research, Inc.
    4. Bouton, Laurent & Llorente-Saguer, Aniol & Malherbe, Frédéric, 2017. "Unanimous rules in the laboratory," Games and Economic Behavior, Elsevier, vol. 102(C), pages 179-198.
    5. Lydia Mechtenberg & Jean-Robert Tyran, 2016. "Voter Motivation and the Quality of Democratic Choice," Discussion Papers 16-13, University of Copenhagen. Department of Economics.
    6. Kawamura, Kohei & Vlaseros, Vasileios, 2017. "Expert information and majority decisions," Journal of Public Economics, Elsevier, vol. 147(C), pages 77-88.
    7. Otto (O.H.) Swank & Bauke (B.) Visser, 2018. "Committees as Active Audiences: Reputation Concerns and Information Acquisition," Tinbergen Institute Discussion Papers 18-068/VII, Tinbergen Institute.
    8. Alessandro RIBONI & Francisco RUGE-MURCIA, 2018. "Deliberation in Committees : Theory and Evidence from the FOMC," Cahiers de recherche 01-2018, Centre interuniversitaire de recherche en économie quantitative, CIREQ.

    More about this item

    Keywords

    Committee Decision-Making ; Deliberation ; Transparency ; Career Concerns ; Information Aggregation ; Experiments ; Voting ; Strategic Communication;

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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