Information Acquisition in Committees

54 Pages Posted: 3 Sep 2007

See all articles by Dino Gerardi

Dino Gerardi

Yale University - Cowles Foundation

Leeat Yariv

Princeton University

Date Written: May 2007

Abstract

The goal of this paper is to illustrate the significance of information acquisition in mechanism design. We provide a stark example of a mechanism design problem in a collective choice environment with information acquisition. We concentrate on committees that are comprised of agents sharing a common goal and having a joint task. Members of the committee decide whether to acquire costly information or not at the outset and are then asked to report their private information. The designer can choose the size of the committee, as well as the procedure by which it selects the collective choice, i.e., the correspondence between agents' reports and distributions over collective choices. We show that the ex-ante optimal device may be ex-post inefficient, i.e., lead to suboptimal aggregation of information from a statistical point of view. For particular classes of parameters, we describe the full structure of the optimal mechanisms.

Keywords: D71, D72, D78

JEL Classification: Collective choice, Mechanism design, Information a

Suggested Citation

Gerardi, Dino and Yariv, Leeat, Information Acquisition in Committees (May 2007). Cowles Foundation Discussion Paper No. 1411R. Available at SSRN: https://ssrn.com/abstract=1010345

Dino Gerardi (Contact Author)

Yale University - Cowles Foundation ( email )

Box 208281
New Haven, CT 06520-8281
United States
203-432-3562 (Phone)
203-432-5779 (Fax)

Leeat Yariv

Princeton University ( email )

Princeton, NJ 08544-1021
United States

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