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Appointed learning for the common good: Optimal committee size and monetary transfers

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  • Gersbach, Hans
  • Mamageishvili, Akaki
  • Tejada, Oriol

Abstract

A population of identical individuals must choose one of two alternatives under uncertainty about the state of the world. Individuals can acquire different levels of costly information and complete contracts are not feasible. For such a setup, we investigate how vote delegation to a committee and suitable monetary transfers for its members can ensure that high or optimal levels of information are (jointly) acquired. We show that for a (stable) committee that uses the majority rule to maximize the probability of choosing the right alternative and then to minimize aggregate information acquisition costs, its size must be small in absolute terms (if full learning is possible) and small relative to population size (if only partial learning is possible). Yet committees must never be made up of one member, so the tyranny of a single decision-maker can be avoided. Our analysis identifies both the potential and some of the limitations of monetary transfers in committee design.

Suggested Citation

  • Gersbach, Hans & Mamageishvili, Akaki & Tejada, Oriol, 2022. "Appointed learning for the common good: Optimal committee size and monetary transfers," Games and Economic Behavior, Elsevier, vol. 136(C), pages 153-176.
    • Handle: RePEc:eee:gamebe:v:136:y:2022:i:c:p:153-176
    DOI: 10.1016/j.geb.2022.04.005
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    More about this item

    Keywords

    Voting; Committee; Information acquisition; Monetary transfers; Majority rule; Incomplete social contracts;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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