Information Aggregation in Stratified Societies

We analyze a model of political competition in which the elite forms endogenously to aggregate information and advise the uninformed median voter which candidate to choose. The median voter knows whether or not the endorsed candidate is biased toward the elites, but might still prefer the biased candidate if the elite’s endorsement provides sufficient information about her competence. The elite size and the degree of information aggregation by the elite depend on the extent to which the median voter follows the elite’s advice. A higher cost of redistribution minimizes the elite’s information advantage, hinders information transmission, and decreases the expected competence of the elected politician.

Keywords: trust, inequality, political economy, cheap talk, information club

JEL Classification: D72, D83

Suggested Citation: Suggested Citation

Agranov, Marina and Eilat, Ran and Sonin, Konstantin, Information Aggregation in Stratified Societies (July 31, 2023). University of Chicago, Becker Friedman Institute for Economics Working Paper No. 2020-50, Available at SSRN: https://ssrn.com/abstract=3585370 or http://dx.doi.org/10.2139/ssrn.3585370