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Ignorance and Bias in Collective Decisions

Elbittar, Alexander and Gomberg, Andrei and Martinelli, Cesar and Palfrey, Thomas R. (2014) Ignorance and Bias in Collective Decisions. Social Science Working Paper, 1386. California Institute of Technology , Pasadena, CA. (Unpublished) http://resolver.caltech.edu/CaltechAUTHORS:20160301-133946961

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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 equilibrium 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.


Item Type:Report or Paper (Working Paper)
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http://resolver.caltech.edu/CaltechAUTHORS:20171208-140248447Related ItemPublished Version
Additional Information:March 17, 2014. The authors thank CONACYT (grant 61501) and Asociación Mexicana de Cultura for financial support. Palfrey is grateful for financial support from NSF (SES-0962802) and the Gordon and Betty Moore Foundation (GBMF#1158). The paper benefited from comments and suggestions from audiences at the 2012 Latin American Meetings of the Econometric Society at University of the Pacific, Lima, the University of Technology, Sydney, the Department of Industrial Engineering at University of Chile, George Mason University, and the 2014 Santa Barbara Conference on Experimental and Behavioral Economics. Kirill Pogorelskiy provided excellent research assistance.
Group:Social Science Working Papers
Funders:
Funding AgencyGrant Number
Consejo Nacional de Ciencia y Tecnología (CONACYT)61501
Asociación Mexicana de CulturaUNSPECIFIED
NSFSES-0962802
Gordon and Betty Moore Foundation1158
Subject Keywords:Condorcet jury theorem, rational ignorance, homemade priors
Classification Code:JEL D72, D83
Record Number:CaltechAUTHORS:20160301-133946961
Persistent URL:http://resolver.caltech.edu/CaltechAUTHORS:20160301-133946961
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:64917
Collection:CaltechAUTHORS
Deposited By: Susan Vite
Deposited On:04 Mar 2016 22:28
Last Modified:21 Dec 2017 00:39

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