Collective Information Acquisition

Kfir Eliaz and Ran Eilat

No 15324, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We consider the problem faced by a group of players who need to collectively decide what public signal to acquire, and how to share its cost, before voting on whether to take some action, when each player is privately informed about his state-dependent payoffs from the action. We characterize the welfare maximizing mechanism for information acquisition taking into account the subsequent voting game. We identify novel distortions that arise from the information asymmetry and from the fact that after observing the signal realization, the players vote independently of their actions in the mechanism.

Keywords: Collective decision-making; Mechanism-design; Information-design; Rational inattention; Public good provision (search for similar items in EconPapers)
Date: 2020-09
New Economics Papers: this item is included in nep-cdm, nep-des, nep-gth and nep-mic
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