Premise-Based Versus Outcome-Based Information Aggregation

23 Pages Posted: 20 Jan 2012  

Geoffroy de Clippel

Brown University - Department of Economics

Kfir Eliaz

Brown University

Date Written: January 2012

Abstract

A group of rational individuals with common interest need to select one of two outcomes. The optimal decision depends on whether certain premises or pieces of evidence are established as being true, and each member receives a noisy signal of the truth value of the relevant premises. Should the group reach a decision by voting whether each premise is true or false, or should they simply vote on the outcome? We show that for any finite number of individuals, the premise-based voting rule is more efficient in aggregating information than the outcome-based rule. However, generically, the gain from using the premise-based over the outcome-based rule can only be marginal when numerous individuals express independent opinions. Indeed, the outcome-based game is almost always asymptotically efficient.

Keywords: Common Interest, Discursive Dilemma, Doctrinal Paradox, Information Aggregation, Voting

JEL Classification: C72, D02, D72, D82

Suggested Citation

de Clippel, Geoffroy and Eliaz, Kfir, Premise-Based Versus Outcome-Based Information Aggregation (January 2012). CEPR Discussion Paper No. DP8733. Available at SSRN: https://ssrn.com/abstract=1988665

Geoffrey De Clippel (Contact Author)

Brown University - Department of Economics ( email )

64 Waterman Street
Providence, RI 02912
United States

Kfir Eliaz

Brown University ( email )

Economics Dept.
Box B
Providence, RI 02912
United States
401-863-2112 (Phone)
401-863-1970 (Fax)

HOME PAGE: http://www.econ.brown.edu/fac/Kfir_Eliaz/

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