Information Acquisition in Committees

TitleInformation Acquisition in Committees
Publication TypeJournal Article
Year of Publication2008
AuthorsGerardi D, Yariv L
JournalGames and Economic Behavior
Pagination - 459
Date PublishedMarch 2008
ISBN Number0899-8256, 0899-8256
KeywordsAsymmetric and Private Information, Mechanism Design (D82), Committees, Information, Information Acquisition, Search, Learning, Information and Knowledge, Communication, Belief, Unawareness (D83), Social Choice, Clubs, Committees, Associations (D71)
AbstractThe 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.