Ignorance and bias in collective decision:Theory and experiments

Ignorance and bias in collective decision:Theory and experiments
Date: 2014
By: Alexander Elvitar (Centro de Investigación y Docencia Económicas, (CIDE))
Andrei Gomberg (Centro de Investigación Económica (CIE), Instituto Tecnológico Autónomo de México (ITAM))
César Martinelli (Centro de Investigación Económica (CIE), Instituto Tecnológico Autónomo de México (ITAM))
Thomas R. Palfrey (California Institute of Technology)
URL: http://d.repec.org/n?u=RePEc:cie:wpaper:1401&r=net
We consider a committee with common interests. Committee members do not know which of two alternatives is the best, but each member may acquire privately a costly signal before casting a vote under either majority or unanimity rule. In the lab, as predicted by Bayesian equilibrium, voters are more likely to acquire information under majority rule, and attempt to counter the bias built in favor of one alternative under unanimity rule. As opposed to Bayesian equilibrium predictions, however, some committee members vote for either alternative when uninformed. Moreover, uninformed voting is correlated with a lower disposition to acquire information. We show that an equilibrium model of subjective prior beliefs may account for this correlation, and provides a good fit for the observed patterns of behavior both in terms of rational ignorance and biases.
Keywords: Condorcet jury theorem, rational ignorance, homemade priors
JEL: D72 D83

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