Conflicts and Common Interests in Committees

Abstract

Committees improve decisions by pooling independent information of members, but promote manipulation, obfuscation, and exaggeration of private information when members have conflicting preferences. When members' preferences differ, the report submitted by any individual can not allow perfect inference of his private information. Equilibrium outcomes transform ontinuous data into ordered ranks: voting procedures are the equilibrium methods that achieve consensus in committees. Voting necessarily coarsens the transmission of information among members, but is necessary to control strategic manipulations. Though impeded by conflicts, information sharing among committee members occurs nonetheless. Each member becomes more cautious in casting the crucial vote than when he alone makes the decision based on his own information. Increased quality of one member's information results in his casting the crucial vote more often. Committees make better decisions for at least one member than other modes of decision-making that do not depend on information sharing, such as taking turns or delegation. Committees are viable, though imperfect ways of making decisions when information is dispersed among members with conflicting interests.

JEL Classification: D00, J00