Wisdom of the Crowd? Information Aggregation in Representative Democracy
29 Pages Posted: 5 Jul 2017 Last revised: 14 Nov 2018
Date Written: November 14, 2018
In representative democracy, voters elect candidates who strategically propose policies. In a common value environment with imperfectly informed voters and candidates, we establish that information aggregation can be unfeasible even when a large electorate presented with exogenous options would almost always select the correct policy. In fact, the possibility of information aggregation encourages candidates' conformism and stifles the competition among ideas. As a result, we uncover circumstances under which a single voter can outperform a large electorate in term of policy outcomes, thereby providing an important qualification to the existing epistemic defense of democracy. Neither liberalizing access to candidacy nor introducing additional frictions in voters' preferences or information guarantees feasible information aggregation. Thus, the political failure we uncover is due to the intermediation by candidates---that is, the nature of representative democracy.
Keywords: political failure, representation, information aggregation, intermediation
JEL Classification: D70, D72, D82
Suggested Citation: Suggested Citation