Committees as Active Audiences: Reputation Concerns and Information Acquisition
Otto (O.H.) Swank () and
Bauke Visser ()
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Otto (O.H.) Swank: Erasmus University Rotterdam
No 18-068/VII, Tinbergen Institute Discussion Papers from Tinbergen Institute
We study committees that acquire information, deliberate and vote. A member cares about state-dependent decision payoffs and about his reputation for expertise. The state remains unobserved, even after the decision has been taken. In such inconclusive environments, in equilibrium, a member's internal (peer) reputation is based on deliberation patterns, while members' external (market) reputation is based on the observed group decision. Either form of reputation concerns create strategic complementarity among members' effort levels. Internal reputations create stronger incentives to become informed than external reputations, and their strength grows in committee size; external reputations create no incentives in large committees. If prior information favors a state, internal -- not external – reputations may hinder deliberation. In equilibrium, reputation concerns lead to additional information acquisition without affecting the expected reputations. Nevertheless, moderate rates of reputation concerns relax members' participation constraints, by counteracting the often predicted underprovision of information in committees.
Keywords: committee decision making; reputation concerns; information acquisition; peers; markets (search for similar items in EconPapers)
JEL-codes: D71 D83 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20180068
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