Discussion Paper Details

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Title: Collective Information Acquisition

Author(s): Ran Eilat and Kfir Eliaz

Publication Date: September 2020

Keyword(s): collective decision-making, Information-design, Mechanism-Design, Public Good Provision and rational inattention

Programme Area(s): Industrial Organization

Abstract: We consider the problem faced by a group of players who need to collectively decide what public signal to acquire, and how to share its cost, before voting on whether to take some action, when each player is privately informed about his state-dependent payoffs from the action. We characterize the welfare maximizing mechanism for information acquisition taking into account the subsequent voting game. We identify novel distortions that arise from the information asymmetry and from the fact that after observing the signal realization, the players vote independently of their actions in the mechanism.

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Bibliographic Reference

Eilat, R and Eliaz, K. 2020. 'Collective Information Acquisition'. London, Centre for Economic Policy Research.