Individual and Collective Information Acquisition: An Experimental Study / Pëllumb Reshidi, Alessandro Lizzeri, Leeat Yariv, Jimmy H. Chan, Wing Suen.

Format:

Book

Author/Creator:

Reshidi, Pëllumb.

Contributor:

National Bureau of Economic Research.

Lizzeri, Alessandro.

Yariv, Leeat.

Chan, Jimmy H.

Suen, Wing.

Series:

Working Paper Series (National Bureau of Economic Research) no. w29557.

NBER working paper series no. w29557

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2021.

Summary:

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.

Notes:

Print version record

December 2021.