The Downsides of Information Transmission for Voting: A Problem and Some Institutional Remedies

Abstract

I analyze a model of information transmission in collective choice environments. An Expert possesses private information about the consequences of passing an exogenous proposal and may engage in cheap talk to persuade the voters to pass or reject the proposal. In some cases, the Expert may successfully persuade the voters to take her preferred action even though all or most voters would receive a better ex ante payoff with no information transmission. I consider several remedies that an institutional designer may consider in order to avoid this problem while allowing information transmission that benefits the voters. Specifically, I evaluate the effects of (i) limiting Expert communication to to binary endorsements, (ii) encouraging competition between Experts, and (iii) restricting the agenda in order to consider only one issue at a time. None of these proposals completely eliminate negative persuasion outcomes, but limiting the Expert to binary endorsements would avoid the worst forms of Expert manipulation while preserving equilibria in which information transmission is beneficial for the voters.

Keywords: Cheap talk, signaling, social choice theory

JEL Classification: D70, D71, D72, D78, D82, D83