When is the Crowd Wise?

21 Pages Posted: 11 Dec 2017

See all articles by Itai Arieli

Itai Arieli

Technion-Israel Institute of Technology

Yakov Babichenko

Technion, Industrial Engineering and Managemenet

Rann Smorodinsky

Technion-Israel Institute of Technology - The William Davidson Faculty of Industrial Engineering & Management

Date Written: December 6, 2017

Abstract

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.

Suggested Citation

Arieli, Itai and Babichenko, Yakov and Smorodinsky, Rann, When is the Crowd Wise? (December 6, 2017). Available at SSRN: https://ssrn.com/abstract=3083608 or http://dx.doi.org/10.2139/ssrn.3083608

Itai Arieli (Contact Author)

Technion-Israel Institute of Technology ( email )

Technion City
Haifa 32000, Haifa 32000
Israel

Yakov Babichenko

Technion, Industrial Engineering and Managemenet ( email )

Hiafa, 3434113
Israel

Rann Smorodinsky

Technion-Israel Institute of Technology - The William Davidson Faculty of Industrial Engineering & Management ( email )

Haifa 32000
Israel

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
157
Abstract Views
922
rank
209,425
PlumX Metrics