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Aggregation of opinions in networks of individuals and collectives

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  • Crès, Hervé
  • Tvede, Mich

Abstract

We study the formation of opinions in a bipartite network of firms' boards and directors theoretically. A director and a board are connected provided the director is a board member. Opinions are sets of beliefs about the likelihood of different states of the world tomorrow. Our basic assumption is that boards as well as directors aggregate opinions of each other: a production plan is better than another for a board (director) provided every director (board of which she is a member) finds it better. Opinions are stable provided aggregation does not result in revision of opinions. We show that for connected networks: opinions are stable if and only if they are unambiguous and identical; and repeated aggregation leads to stable opinions. Hence, there will eventually be a single society-wide intersubjective “truth”.

Suggested Citation

  • Crès, Hervé & Tvede, Mich, 2022. "Aggregation of opinions in networks of individuals and collectives," Journal of Economic Theory, Elsevier, vol. 199(C).
    • Handle: RePEc:eee:jetheo:v:199:y:2022:i:c:s0022053121001228
    DOI: 10.1016/j.jet.2021.105305
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    More about this item

    Keywords

    Boards; Directors; Networks; Pareto principle;
    All these keywords.

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D6 - Microeconomics - - Welfare Economics
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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