Sequential Aggregation of Verifiable Information

CER-ETH – Center of Economic Research at ETH Zurich Working Paper No. 10/136

43 Pages Posted: 29 Sep 2010

Multiple version iconThere are 2 versions of this paper

Date Written: September 1, 2010

Abstract

We introduce the notion of verifiable information into a model of sequential debate among experts who are motivated by career concerns. We show that self-censorship may hamper the efficiency of information aggregation, as experts withhold evidence contradicting the conventional wisdom. In this case, silence is telling and undermines the prevailing view over time if this view is incorrect. As a result, withholding arguments about the correct state of the world is only a temporary phenomenon, and the probability of the correct state of the world being revealed always converges to one as the group of experts becomes large. For small groups, a simple mechanism the principal can use to improve decisionmaking is to appoint a devil’s advocate.

Keywords: experts, committees, career concerns, verifiable information, information aggregation

JEL Classification: D71, D82

Suggested Citation

Hahn, Volker, Sequential Aggregation of Verifiable Information (September 1, 2010). CER-ETH – Center of Economic Research at ETH Zurich Working Paper No. 10/136. Available at SSRN: https://ssrn.com/abstract=1684015 or http://dx.doi.org/10.2139/ssrn.1684015

Volker Hahn (Contact Author)

University of Konstanz ( email )

Box 143
Konstanz, 78457
Germany

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