When Ignorance Is Bliss: Theory and Experiment on Collective Learning
56 Pages Posted: 23 Feb 2017
Date Written: February 23, 2017
When do groups and societies choose to be uninformed? We study a committee that needs to vote on a reform which will give every member a private state- dependent payoff. The committee can vote to learn the state at no cost. We show that the committee decides not to learn the state when preferences are more fractionalized on the state-relevant dimension than on the state-irrelevant dimension. Hence, decisions on divisive issues are likely to be made in haste, and heterogeneous societies tend to seek less information. A simple laboratory experiment confirms key results.
Keywords: voting, collective learning, reform adoption, information acquisition, laboratory experiment
JEL Classification: C72, C92, D71, D72, D83
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