Information acquisition in committees

Dino Gerardi, Leeat Yariv

Research output: Contribution to journalArticle

51 Scopus citations

Abstract

The goal of this paper is to illustrate the significance of information acquisition in mechanism design. We provide a stark example of a mechanism design problem in a collective choice environment with information acquisition. We concentrate on committees that are comprised of agents sharing a common goal and having a joint task. Members of the committee decide whether to acquire costly information or not at the outset and are then asked to report their private information. The designer can choose the size of the committee, as well as the procedure by which it selects the collective choice, i.e., the correspondence between agents' reports and distributions over collective choices. We show that the ex ante optimal device may be ex post inefficient, i.e., lead to suboptimal aggregation of information from a statistical point of view. For particular classes of parameters, we describe the full structure of the optimal mechanisms.

Original languageEnglish (US)
Pages (from-to)436-459
Number of pages24
JournalGames and Economic Behavior
Volume62
Issue number2
DOIs
StatePublished - Mar 1 2008
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

Keywords

  • Collective choice
  • Information acquisition
  • Mechanism design

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