When is the Crowd Wise?
21 Pages Posted: 11 Dec 2017
Date Written: December 6, 2017
Consider a setting where many individuals make predictions over the (unknown) state of nature based on signals they receive independently. An outside Bayesian observer, familiar with the common prior shared by the individuals, can aggregate this information and identify correctly the actual state of nature. However, what if the aggregator is ignorant with respect to the common prior? An information structure is said to be identifiable whenever the ignorant aggregator can identify the state. We characterize the set of identifiable information structures and also unveil the fragility of information aggregation in markets with respect to the common prior assumption.
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