Working Paper: NBER ID: w29557
Authors: Pllumb Reshidi; Alessandro Lizzeri; Leeat Yariv; Jimmy H. 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; Decision Making; Experimental Study; Static vs. Dynamic Collection; Majority vs. Unanimity
JEL Codes: C91; C92; D7; D8
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 behavior (D91) |
| static information collection (C80) | decrease in decision accuracy (D91) |
| dynamic information collection (unanimity rules) (D79) | enhanced welfare (I38) |
| dynamic information collection (unanimity rules) (D79) | higher decision accuracy (D79) |
| majority rule (D72) | quicker decisions (D91) |
| majority rule (D72) | lower decision accuracy (D79) |
| dynamic information collection (majority rules) (D79) | hasty decisions (D91) |