Working Paper: CEPR ID: DP16782
Authors: Pellumb Reshidi; Alessandro Lizzeri; Leeat Yariv; Jimmy Chan; Wing Suen
Abstract: Many committees---juries, political task forces, etc.---spend time gathering costly information before reaching a decision. We report results from lab experiments focused on such information-collection processes. We consider decisions governed by individuals and groups and compare how voting rules affect outcomes. We also contrast static information collection, as in classical hypothesis testing, with dynamic collection, as in sequential hypothesis testing. Several insights emerge. Static information collection is excessive, and sequential information collection is non-stationary, producing declining decision accuracies over time. Furthermore, groups using majority rule yield especially hasty and inaccurate decisions. Nonetheless, sequential information collection is welfare enhancing relative to static collection, particularly when unanimous rules are used.
Keywords: information acquisition; collective choice; experiments
JEL Codes: C91; C92; D72; D83; D87
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| static information collection (C80) | excessive decision-making durations (D91) |
| dynamic information collection (C80) | declining decision accuracies over time (C45) |
| majority rule (D72) | hasty and inaccurate decisions (D91) |
| sequential information collection under unanimous decision-making rules (D70) | welfare enhancement (I38) |
| dynamic information collection with unanimous voting (D79) | highest welfare (I30) |
| hastiness in majority rule decisions (D79) | detrimental to decision accuracy (D91) |
| voting rules (K16) | influence decision-making process (D91) |