Expert Information and Majority Decisions: Theory and Experiment

Wednesday 25 June 2014, 1.00PM to 2.00pm

Speaker(s): Kohei Kawamura, University of Edinburgh

Abstract:

This paper shows theoretically and experimentally that hearing expert opinions can be a double-edged sword for decision making committees. We study a majoritarian voting game of common interest where committee members receive not only private information, but also expert information that is more accurate than private information and observed by all members. In theory, there are Bayesian Nash equilibria where the committee members' voting strategy incorporates both types of information and access to expert information enhances the efficiency of the majority decision. However, there is a class of potentially inefficient equilibria where a supermajority always follow expert information and the majority decision does not aggregate private information. In the laboratory, too many subjects voted according to expert information compared to the predictions from the efficient equilibria. We found a large efficiency loss due to the presence of expert information when the committee size was large. We suggest that it may be desirable for expert information to be revealed only to a subset of committee members

Location: ARRC Auditorium (A/RC/014)

Admission: All welcome