Putting Your Ballot Where Your Mouth is: An Analysis of Collective Choice with Communication

The goal of this paper is to analyze collective decision making with communica-tion.

We concentrate on decision panels that are comprised of a collection of agents

sharing a common goal, having a joint task, and possessing the ability to communi-cate

at no cost. We first show that communication renders all intermediate threshold

voting rules equivalent with respect to the sequential equilibrium outcomes they pro-duce.

We then proceed to analyze the mechanism design problem in an environment

in which members of the group decide whether to acquire costly information or not,

preceding the communication stage. We find that: 1. Groups producing the opti-mal

collective decisions are bounded in size; and 2. The optimal incentive scheme in

such an environment balances a tradeo .between inducing players to acquire infor-mation

and extracting the maximal amount of information from them. In particular,

the optimal device may aggregate information suboptimally from a statistical point

of view. In addition, we provide some comparative statics results on the optimal

extended mechanism for collective choice.

For more information, contact Antonio Merlo.