DP6677 Information Acquisition and Transparency in Committees

Author(s):	Hans Gersbach, Volker Hahn
Publication Date:	February 2008
Keyword(s):	career concerns, committees, experts, information acquisition, transparency
JEL(s):	D70
Programme Areas:	Public Economics
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=6677

We study a two-period model of committee decision-making where members differ in their levels of efficiency. They may acquire costly information that enhances their ability to make a correct decision. We focus on the impact of transparency. We show that the principal's initial utility is higher under transparency, because members exert more effort, which makes correct decisions more likely. The principal also benefits from transparency later, unless transparency leads to an alignment of the signal qualities of highly efficient and less efficient committee members. In general, committee members are harmed by transparency.