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

Hans Gersbach, Akaki Mamageishvili and Oriol Tejada

Games and Economic Behavior, 2022, vol. 136, issue C, 153-176

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.

Keywords: Voting; Committee; Information acquisition; Monetary transfers; Majority rule; Incomplete social contracts (search for similar items in EconPapers)
JEL-codes: C72 D71 D8 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:136:y:2022:i:c:p:153-176

DOI: 10.1016/j.geb.2022.04.005

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