Ignorance and Bias in Collective Decisions

Paper Number: 
1386
Creation date: 
07/21/2014
Abstract: 

We study theoretically and experimentally a committee with common interests.  Committee members do not know which of two alternatives is the best, but each member can acquire privately a costly signal before casting a vote under either majority or unanimity rule.  In the experiment, as predicted by Bayesian equilibrium, voters are more likely to acquire information under majority rule, and attempt to counter the bias in favor of one alternative under unanimity rule. As opposed to Bayesian equilibrium predictions, however, many committee members vote when uninformed.  Moreover, uninformed voting is strongly associated with a lower propensity to acquire information. We show that an equilibrum model of subjective prior beliefs can account for both these phenomena, and provides a good overall fit to the observed patterns of behavior both in terms of rational ignorance and biases.

Paper Length: 
40
Keywords: 
condorcet jury theorem, rational ignorance, homemade priors
Paper: