Wisdom of the Crowd? Information Aggregation in Representative Democracy
27 Pages Posted: 5 Jul 2017 Last revised: 31 Aug 2020
Date Written: November 14, 2018
The Condorcet Jury Theorem and subsequent literature establish that in a common-value environment with exogenous policy options, information aggregation is feasible: A large electorate of imperfectly informed voters almost always selects the correct policy option. In this paper, we show that these desirable properties of direct democracy do not necessarily carry over to representative democracy. Depending on candidates' motivations and information, representative democracy can select the correct policy with either higher or lower probability than direct democracy. In particular, information aggregation is not always feasible. Somewhat paradoxically, the possibility of information aggregation by voters encourages strategic conformism by candidates. Our findings are robust to various assumptions about candidate entry, voter information and behavior. They suggest that epistemic arguments in favor of democracy need to be qualified.
Keywords: political failure, representation, information aggregation, intermediation
JEL Classification: D70, D72, D82
Suggested Citation: Suggested Citation