Polarization in Group Interactions
47 Pages Posted: 20 Oct 2018
Date Written: September 26, 2018
We study the phenomenon of strategic polarization in group interactions. Agents with private preferences choose a public action (e.g., voice opinions), and the mean of their actions represents the group’s realized outcome. They face a trade-off between influencing the group outcome and truth-telling. In equilibrium, agents strategically shade their actions towards the extreme leading to polarization. The group outcome is also more extreme than the mean preference. Compared to a simultaneous actions game, randomized (or exogenous) sequential actions lowers polarization when agents’ preferences are relatively similar. Endogenizing the order of moves always increases polarization, though it is also welfare enhancing.
Keywords: group decision, polarization, social choice
JEL Classification: D7, D71, D72, D78, D80
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