Aggregation of Expert Opinions

41 Pages Posted: 5 Apr 2005  

Dino Gerardi

Yale University - Cowles Foundation

Richard P. McLean

Rutgers University - Department of Economics

Andrew Postlewaite

University of Pennsylvania - Department of Economics

Date Written: April 2005

Abstract

Conflicts of interest arise between a decision maker and agents who have information pertinent to the problem because of differences in their preferences over outcomes. We show how the decision maker can extract the information by distorting the decisions that will be taken, and show that only slight distortions will be necessary when agents are "informationally small". We further show that as the number of informed agents becomes large the necessary distortion goes to zero. We argue that the particular mechanisms analyzed are substantially less demanding informationally than those typically employed in implementation and virtual implementation. In particular, the equilibria we analyze are "conditionally" dominant strategy in a precise sense. Further, the mechanisms are immune to manipulation by small groups of agents.

Keywords: Information aggregation, Asymmetric information, Cheap talk, Experts

JEL Classification: C72, D78, D82

Suggested Citation

Gerardi, Dino and McLean, Richard P. and Postlewaite, Andrew, Aggregation of Expert Opinions (April 2005). PIER Working Paper No. 05-016; Cowles Foundation Discussion Paper No. 1503. Available at SSRN: https://ssrn.com/abstract=699121 or http://dx.doi.org/10.2139/ssrn.699121

Dino Gerardi (Contact Author)

Yale University - Cowles Foundation ( email )

Box 208281
New Haven, CT 06520-8281
United States
203-432-3562 (Phone)
203-432-5779 (Fax)

Richard P. McLean

Rutgers University - Department of Economics ( email )

75 Hamilton Street
New Jersey Hall
New Brunswick, NJ 08901
United States
732-932-7709 (Phone)
732-932-7416 (Fax)

Andrew Postlewaite

University of Pennsylvania - Department of Economics ( email )

160 McNeil Building
3718 Locust Walk
Philadelphia, PA 19104
United States
215-898-7350 (Phone)
215-573-2057 (Fax)

HOME PAGE: http://www.econ.upenn.edu/~apostlew

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