DP8733 Premise-Based versus Outcome-Based Information Aggregation
|Author(s):||Geoffroy de Clippel, Kfir Eliaz|
|Publication Date:||January 2012|
|Keyword(s):||Common Interest, Discursive Dilemma, Doctrinal Paradox, Information Aggregation, Voting|
|JEL(s):||C72, D02, D72, D82|
|Programme Areas:||Industrial Organization|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=8733|
A group of rational individuals with common interest need to select one of two outcomes. The optimal decision depends on whether certain premises or pieces of evidence are established as being true, and each member receives a noisy signal of the truth value of the relevant premises. Should the group reach a decision by voting whether each premise is true or false, or should they simply vote on the outcome? We show that for any finite number of individuals, the premise-based voting rule is more efficient in aggregating information than the outcome-based rule. However, generically, the gain from using the premise-based over the outcome-based rule can only be marginal when numerous individuals express independent opinions. Indeed, the outcome-based game is almost always asymptotically efficient.