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Information aggregation in large collective purchases

Author

Listed:
  • Itai Arieli

    (Technion)

  • Moran Koren

    (Ben Gurion University of the Negev)

  • Rann Smorodinsky

    (Technion)

Abstract

Society uses the following mechanism to decide on the supply of an experience good. Each agent can choose whether or not to contribute to the good. Contributions are collected, and the good is supplied whenever total contributions exceed a threshold. We study the case where the good is excludable, agents have a common value, and each agent receives a private signal about the common value. We study how such collective decisions perform in terms of information aggregation, social efficiency, and market traction.

Suggested Citation

  • Itai Arieli & Moran Koren & Rann Smorodinsky, 2024. "Information aggregation in large collective purchases," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 78(1), pages 295-345, August.
    • Handle: RePEc:spr:joecth:v:78:y:2024:i:1:d:10.1007_s00199-023-01525-w
    DOI: 10.1007/s00199-023-01525-w
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    More about this item

    Keywords

    Information aggregation; Crowdfunding; Public good; Voting; Threshold;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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