Communication and Information Aggregation for Multitype Information

Abstract

This study introduces communication into the Condorcet jury model with uncertain precision of signals and examine how communication and majority voting aggregate multitype information. We consider common-value voting when the precision state, independent of the payoff-relevant state, determines the meaning and precision of decision-makers' (DMs') private signals related to the payoff-relevant state. Multiple senders with the same objective as DMs receive noisy signals about the precision state and send messages to the DMs simultaneously. We focus on equilibria in which when the sender's message suggests the possibility of a particular precision state, DMs vote presumes that the precision state is the particular state. We demonstrate that when the number of DMs is sufficiently large, senders transmit no information and hence information aggregation fails. Furthermore, we propose that, if senders' messages are aggregated to the binary level, information transmission is successful, and thus information is fully aggregated asymptotically.

Keywords: Condorcet jury theorem, strategic voting, communication failure, transparency reduction

JEL Classification: D71, D72, D82, D83