IDEAS home Printed from https://ideas.repec.org/a/aea/aejmic/v7y2015i4p202-32.html
   My bibliography  Save this article

Group Polarization in a Model of Information Aggregation

Author

Listed:
  • Nicolas Roux
  • Joel Sobel

Abstract

Experiments identify the empirical regularity that groups tend to make decisions that are more extreme, but in the same direction as the tendency of individual members of the group. We present a model of information aggregation consistent with these findings. We assume individuals and groups are rational decision makers facing monotone statistical decision problems where groups and individuals have common preferences, but groups have superior information. We provide conditions under which the distribution of the optimal actions of the group is more variable than the distribution of actions taken by individuals. (JEL D71, D83)

Suggested Citation

  • Nicolas Roux & Joel Sobel, 2015. "Group Polarization in a Model of Information Aggregation," American Economic Journal: Microeconomics, American Economic Association, vol. 7(4), pages 202-232, November.
  • Handle: RePEc:aea:aejmic:v:7:y:2015:i:4:p:202-32
    Note: DOI: 10.1257/mic.20140252
    as

    Download full text from publisher

    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/mic.20140252
    Download Restriction: no

    File URL: http://www.aeaweb.org/aej/mic/ds/0704/2014-0252_ds.zip
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. ,, 2014. "On the relationship between individual and group decisions," Theoretical Economics, Econometric Society, vol. 9(1), January.
    2. Hong, Lu & Page, Scott, 2009. "Interpreted and generated signals," Journal of Economic Theory, Elsevier, vol. 144(5), pages 2174-2196, September.
    3. Joel Sobel, 2014. "On the relationship between individual and group decisions," Levine's Working Paper Archive 786969000000000950, David K. Levine.
    4. Kaas, Rob & Dannenburg, Dennis & Goovaerts, Marc, 1997. "Exact Credibility for Weighted Observations," ASTIN Bulletin, Cambridge University Press, vol. 27(2), pages 287-295, November.
    5. Levy, Haim & Kroll, Yoram, 1978. "Ordering Uncertain Options with Borrowing and Lending," Journal of Finance, American Finance Association, vol. 33(2), pages 553-574, May.
    6. Robert F. Bordley, 1982. "A Multiplicative Formula for Aggregating Probability Assessments," Management Science, INFORMS, vol. 28(10), pages 1137-1148, October.
    7. Attila Ambrus & Ben Greiner & Parag Pathak, 2013. "How individual preferences get aggregated in groups - An experimental study," Discussion Papers 2013-24, School of Economics, The University of New South Wales.
    8. Kfir Eliaz & Debraj Ray & Ronny Razin, 2006. "Choice Shifts in Groups: A Decision-Theoretic Basis," American Economic Review, American Economic Association, vol. 96(4), pages 1321-1332, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xiu Chen & Fuhai Hong & Xiaojian Zhao, 2020. "Concentration and variability of forecasts in artificial investment games: an online experiment on WeChat," Experimental Economics, Springer;Economic Science Association, vol. 23(3), pages 815-847, September.
    2. Axel Ockenfels & Dirk Sliwka & Peter Werner, 2024. "Multi-rater Performance Evaluations and Incentives," ECONtribute Discussion Papers Series 307, University of Bonn and University of Cologne, Germany.
    3. David Dillenberger & Colin Raymond, 2016. "Group-Shift and the Consensus Effect, Second Version," PIER Working Paper Archive 16-015, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 30 Sep 2016.
    4. Athey, Susan & Levin, Jonathan, 2018. "The value of information in monotone decision problems," Research in Economics, Elsevier, vol. 72(1), pages 101-116.
    5. Conde-Ruiz, J. Ignacio & Ganuza, Juan José & Profeta, Paola, 2022. "Statistical discrimination and committees," European Economic Review, Elsevier, vol. 141(C).
    6. Gershoni, Naomi, 2021. "Individual vs. group decision-making: Evidence from a natural experiment in arbitration proceedings," Journal of Public Economics, Elsevier, vol. 201(C).
    7. Dillenberger, David & Raymond, Collin, 2019. "On the consensus effect," Journal of Economic Theory, Elsevier, vol. 183(C), pages 384-416.
    8. Amir, Rabah & Lazzati, Natalia, 2016. "Endogenous information acquisition in Bayesian games with strategic complementarities," Journal of Economic Theory, Elsevier, vol. 163(C), pages 684-698.
    9. Honryo, Takakazu, 2018. "Risky shifts as multi-sender signaling," Journal of Economic Theory, Elsevier, vol. 174(C), pages 273-287.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dillenberger, David & Raymond, Collin, 2019. "On the consensus effect," Journal of Economic Theory, Elsevier, vol. 183(C), pages 384-416.
    2. Stephan Jagau & Theo Offerman, 2018. "Defaults, normative anchors, and the occurrence of risky and cautious shifts," Journal of Risk and Uncertainty, Springer, vol. 56(3), pages 211-236, June.
    3. David Dillenberger & Colin Raymond, 2016. "Group-Shift and the Consensus Effect, Second Version," PIER Working Paper Archive 16-015, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 30 Sep 2016.
    4. Honryo, Takakazu, 2018. "Risky shifts as multi-sender signaling," Journal of Economic Theory, Elsevier, vol. 174(C), pages 273-287.
    5. Laurent Denant-Boemont & Enrico Diecidue & Olivier l’Haridon, 2017. "Patience and time consistency in collective decisions," Experimental Economics, Springer;Economic Science Association, vol. 20(1), pages 181-208, March.
    6. Levy, Gilat & Razin, Ronny, 2022. "Combining forecasts in the presence of ambiguity over correlation structures," Journal of Economic Theory, Elsevier, vol. 199(C).
    7. Levy, Gilat & Razin, Ronny, 2015. "Segregation in Education and Labour Market Discrimination: The Role of Peer Beliefs," CEPR Discussion Papers 10394, C.E.P.R. Discussion Papers.
    8. Levy, Gilat & Razin, Ronny, 2018. "Information diffusion in networks with the Bayesian Peer Influence heuristic," Games and Economic Behavior, Elsevier, vol. 109(C), pages 262-270.
    9. Razin, Ronny & Levy, Gilat, 2020. "Combining forecasts in the presence of ambiguity over correlation structures," LSE Research Online Documents on Economics 104641, London School of Economics and Political Science, LSE Library.
    10. Bougheas, Spiros & Nieboer, Jeroen & Sefton, Martin, 2015. "Risk taking and information aggregation in groups," Journal of Economic Psychology, Elsevier, vol. 51(C), pages 34-47.
    11. Gilat Levy & Ronny Razin, 2017. "The Coevolution of Segregation, Polarized Beliefs, and Discrimination: The Case of Private versus State Education," American Economic Journal: Microeconomics, American Economic Association, vol. 9(4), pages 141-170, November.
    12. P. Jean-Jacques Herings & Dominik Karos & Toygar T. Kerman, 2024. "Belief inducibility and informativeness," Theory and Decision, Springer, vol. 96(4), pages 517-553, June.
    13. Levy, Gilat & Razin, Ronny, 2018. "Information diffusion in networks with the Bayesian Peer Influence heuristic," LSE Research Online Documents on Economics 86554, London School of Economics and Political Science, LSE Library.
    14. Abhijit Banerjee & Olivier Compte, 2024. "Consensus and Disagreement: Information Aggregation under (Not So) Naive Learning," Journal of Political Economy, University of Chicago Press, vol. 132(8), pages 2790-2829.
    15. Xiu Chen & Fuhai Hong & Xiaojian Zhao, 2020. "Concentration and variability of forecasts in artificial investment games: an online experiment on WeChat," Experimental Economics, Springer;Economic Science Association, vol. 23(3), pages 815-847, September.
    16. Oktay Sürücü, 2014. "Lying for the Greater Good: Bounded Rationality in a Team," The International Journal of Economic Behavior - IJEB, Faculty of Business and Administration, University of Bucharest, vol. 4(1), pages 151-163.
    17. Furman, Edward & Landsman, Zinoviy, 2010. "Multivariate Tweedie distributions and some related capital-at-risk analyses," Insurance: Mathematics and Economics, Elsevier, vol. 46(2), pages 351-361, April.
    18. Kuan Xu & Gordon Fisher, 2006. "Myopic loss aversion and margin of safety: the risk of value investing," Quantitative Finance, Taylor & Francis Journals, vol. 6(6), pages 481-494.
    19. Carlsson, Fredrik & Yang, Xiaojun, 2013. "Intertemporal Choice Shifts in Households: Do they occur and are they good?," Working Papers in Economics 569, University of Gothenburg, Department of Economics.
    20. Morone, Andrea & Temerario, Tiziana, 2015. "Eliciting Preferences Over Risk: An Experiment," MPRA Paper 68519, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aejmic:v:7:y:2015:i:4:p:202-32. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.