IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp9027.html
   My bibliography  Save this paper

How Transparency Kills Information Aggregation: Theory and Experiment

Author

Listed:
  • Fehrler, Sebastian

    (University of Bremen)

  • Hughes, Niall

    (University of Warwick)

Abstract

We investigate the potential of transparency to influence committee decision-making. We present a model in which career concerned committee members receive private information of different type-dependent accuracy, deliberate and vote. We study three levels of transparency under which career concerns are predicted to affect behavior differently, and test the model's key predictions in a laboratory experiment. The model's predictions are largely borne out – transparency negatively affects information aggregation at the deliberation and voting stages, leading to sharply different committee error rates than under secrecy. This occurs despite subjects revealing more information under transparency than theory predicts.

Suggested Citation

  • Fehrler, Sebastian & Hughes, Niall, 2015. "How Transparency Kills Information Aggregation: Theory and Experiment," IZA Discussion Papers 9027, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp9027
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp9027.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Irlenbusch, Bernd & Sliwka, Dirk, 2006. "Career concerns in a simple experimental labour market," European Economic Review, Elsevier, vol. 50(1), pages 147-170, January.
    2. Andrea Prat, 2005. "The Wrong Kind of Transparency," American Economic Review, American Economic Association, vol. 95(3), pages 862-877, June.
    3. Gilat Levy, 2007. "Decision Making in Committees: Transparency, Reputation, and Voting Rules," American Economic Review, American Economic Association, vol. 97(1), pages 150-168, March.
    4. Koch, Alexander K. & Morgenstern, Albrecht & Raab, Philippe, 2009. "Career concerns incentives: An experimental test," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 571-588, October.
    5. Bouton, Laurent & Castanheira, Micael & Llorente-Saguer, Aniol, 2016. "Divided majority and information aggregation: Theory and experiment," Journal of Public Economics, Elsevier, vol. 134(C), pages 114-128.
    6. Nadya Malenko, 2014. "Communication and Decision-Making in Corporate Boards," The Review of Financial Studies, Society for Financial Studies, vol. 27(5), pages 1486-1532.
    7. Hans Gersbach & Volker Hahn, 2008. "Should the individual voting records of central bankers be published?," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 30(4), pages 655-683, May.
    8. Joseph Tao-yi Wang & Michael Spezio & Colin F. Camerer, 2006. "Pinocchio's Pupil: Using Eyetracking and Pupil Dilation to Understand Truth-telling and Deception in Games," Levine's Bibliography 321307000000000042, UCLA Department of Economics.
    9. Coughlan, Peter J., 2000. "In Defense of Unanimous Jury Verdicts: Mistrials, Communication, and Strategic Voting," American Political Science Review, Cambridge University Press, vol. 94(2), pages 375-393, June.
    10. Ying Chen & Navin Kartik & Joel Sobel, 2008. "Selecting Cheap-Talk Equilibria," Econometrica, Econometric Society, vol. 76(1), pages 117-136, January.
    11. EllenE. Meade & David Stasavage, 2008. "Publicity of Debate and the Incentive to Dissent: Evidence from the US Federal Reserve," Economic Journal, Royal Economic Society, vol. 118(528), pages 695-717, April.
    12. Otto H. Swank & Bauke Visser, 2013. "Is Transparency To No Avail?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 115(4), pages 967-994, October.
    13. Ottaviani, Marco & Sorensen, Peter, 2001. "Information aggregation in debate: who should speak first?," Journal of Public Economics, Elsevier, vol. 81(3), pages 393-421, September.
    14. Jacob K. Goeree & Leeat Yariv, 2011. "An Experimental Study of Collective Deliberation," Econometrica, Econometric Society, vol. 79(3), pages 893-921, May.
    15. Dimitri Landa & Adam Meirowitz, 2009. "Game Theory, Information, and Deliberative Democracy," American Journal of Political Science, John Wiley & Sons, vol. 53(2), pages 427-444, April.
    16. Bhattacharya, Sourav & Duffy, John & Kim, Sun-Tak, 2014. "Compulsory versus voluntary voting: An experimental study," Games and Economic Behavior, Elsevier, vol. 84(C), pages 111-131.
    17. Battaglini, Marco & Makarov, Uliana, 2014. "Cheap talk with multiple audiences: An experimental analysis," Games and Economic Behavior, Elsevier, vol. 83(C), pages 147-164.
    18. Joseph Tao-yi Wang & Michael Spezio & Colin F. Camerer, 2010. "Pinocchio's Pupil: Using Eyetracking and Pupil Dilation to Understand Truth Telling and Deception in Sender-Receiver Games," American Economic Review, American Economic Association, vol. 100(3), pages 984-1007, June.
    19. Job Swank & Otto H. Swank & Bauke Visser, 2008. "How Committees of Experts Interact with the Outside World: Some Theory, and Evidence from the FOMC," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 478-486, 04-05.
    20. Sobel, Joel, 2013. "Ten possible experiments on communication and deception," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 408-413.
    21. repec:ulb:ulbeco:2013/136800 is not listed on IDEAS
    22. Theo Offerman & Joep Sonnemans & Gijs Van De Kuilen & Peter P. Wakker, 2009. "A Truth Serum for Non-Bayesians: Correcting Proper Scoring Rules for Risk Attitudes ," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(4), pages 1461-1489.
    23. Bauke Visser & Otto H. Swank, 2007. "On Committees of Experts," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(1), pages 337-372.
    24. Cai, Hongbin & Wang, Joseph Tao-Yi, 2006. "Overcommunication in strategic information transmission games," Games and Economic Behavior, Elsevier, vol. 56(1), pages 7-36, July.
    25. Uri Gneezy, 2005. "Deception: The Role of Consequences," American Economic Review, American Economic Association, vol. 95(1), pages 384-394, March.
    26. Sobel, Joel, 2013. "Ten possible experiments on communication and deception," University of California at San Diego, Economics Working Paper Series qt53w1f0w4, Department of Economics, UC San Diego.
    27. Fox, Justin & Van Weelden, Richard, 2012. "Costly transparency," Journal of Public Economics, Elsevier, vol. 96(1), pages 142-150.
    28. Gneezy, Uri & Rockenbach, Bettina & Serra-Garcia, Marta, 2013. "Measuring lying aversion," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 293-300.
    29. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-1451, November.
    30. John Duffy & Sourav Bhattacharya & Sun-Tak Kim, 2012. "Compulsory versus Voluntary Voting: An Experimental Study," Working Paper 492, Department of Economics, University of Pittsburgh, revised Aug 2013.
    31. Bouton, Laurent & Castanheira, Micael & Llorente-Saguer, Aniol, 2016. "Divided majority and information aggregation: Theory and experiment," Journal of Public Economics, Elsevier, vol. 134(C), pages 114-128.
    Full references (including those not matched with items on IDEAS)

    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. Sebastian Fehrler & Moritz Janas, 2021. "Delegation to a Group," Management Science, INFORMS, vol. 67(6), pages 3714-3743, June.
    2. Swank, Otto H. & Visser, Bauke, 2023. "Committees as active audiences: Reputation concerns and information acquisition," Journal of Public Economics, Elsevier, vol. 221(C).
    3. Balmaceda, Felipe, 2021. "Private vs. public communication: Difference of opinion and reputational concerns," Journal of Economic Theory, Elsevier, vol. 196(C).
    4. Lafky, Jonathan & Lai, Ernest K. & Lim, Wooyoung, 2022. "Preferences vs. strategic thinking: An investigation of the causes of overcommunication," Games and Economic Behavior, Elsevier, vol. 136(C), pages 92-116.
    5. Andrea Mattozzi & Marcos Y. Nakaguma, 2016. "Public versus Secret Voting in Committees," Working Papers, Department of Economics 2016_29, University of São Paulo (FEA-USP).
    6. Catonini, Emiliano & Kurbatov, Andrey & Stepanov, Sergey, 2024. "Independent versus collective expertise," Games and Economic Behavior, Elsevier, vol. 143(C), pages 340-356.
    7. Hahn, Volker, 2017. "Committee design with endogenous participation," Games and Economic Behavior, Elsevier, vol. 102(C), pages 388-408.
    8. Otto H. Swank & Bauke Visser, 2007. "Is Transparency to no avail? Committee Decision-making, Pre-meetings, and Credible Deals," Tinbergen Institute Discussion Papers 07-055/1, Tinbergen Institute.
    9. Dugar, Subhasish & Shahriar, Quazi, 2023. "Lying for votes," Games and Economic Behavior, Elsevier, vol. 142(C), pages 46-72.
    10. Quement, Mark T. Le & Marcin, Isabel, 2020. "Communication and voting in heterogeneous committees: An experimental study," Journal of Economic Behavior & Organization, Elsevier, vol. 174(C), pages 449-468.
    11. Blume, Andreas & Lai, Ernest K. & Lim, Wooyoung, 2019. "Eliciting private information with noise: The case of randomized response," Games and Economic Behavior, Elsevier, vol. 113(C), pages 356-380.
    12. Peeters, Ronald & Vorsatz, Marc & Walzl, Markus, 2015. "Beliefs and truth-telling: A laboratory experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 113(C), pages 1-12.
    13. Daniel Gibbs, 2023. "Individual accountability, collective decision-making," Constitutional Political Economy, Springer, vol. 34(4), pages 524-552, December.
    14. Kurschilgen, Michael & Marcin, Isabel, 2019. "Communication is more than information sharing: The role of status-relevant knowledge," Games and Economic Behavior, Elsevier, vol. 113(C), pages 651-672.
    15. Fehrler, Sebastian & Hahn, Volker, 2020. "Committee Decision-Making under the Threat of Leaks," IZA Discussion Papers 13746, Institute of Labor Economics (IZA).
    16. De Moragas, Antoni-Italo, 2022. "Disclosing decision makers’ private interests," European Economic Review, Elsevier, vol. 150(C).
    17. Sobel, Joel, 2013. "Ten possible experiments on communication and deception," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 408-413.
    18. Ertac, Seda & Koçkesen, Levent & Ozdemir, Duygu, 2016. "The role of verifiability and privacy in the strategic provision of performance feedback: Theory and experimental evidence," Games and Economic Behavior, Elsevier, vol. 100(C), pages 24-45.
    19. Xiaolin Li & Özalp Özer & Upender Subramanian, 2022. "Are We Strategically Naïve or Guided by Trust and Trustworthiness in Cheap-Talk Communication?," Management Science, INFORMS, vol. 68(1), pages 376-398, January.
    20. Name-Correa, Alvaro J. & Yildirim, Huseyin, 2019. "Social pressure, transparency, and voting in committees," Journal of Economic Theory, Elsevier, vol. 184(C).

    More about this item

    Keywords

    committee decision-making; deliberation; transparency; career concerns; information aggregation; experiments; voting; strategic communication;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:iza:izadps:dp9027. 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: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.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.