Over-caution of large committees of experts

Rune Midjord, Tomás Rodríguez and Justin Valasek ()

Discussion Papers, Research Unit: Economics of Change from WZB Berlin Social Science Center

Abstract: We provide an explanation for why committees may behave over-cautiously. A committee of experts makes a decision on a proposed innovation on behalf of 'society'. Each expert's signal about the innovation's quality is generated by the available evidence and the best practices of the experts' common discipline, which is only indirectly related to the true state of the world. In addition to a payoff linked to the adequateness of the committee's decision, each expert receives a disesteem payoff if he/she voted in favor of an ill-fated innovation. No matter how small the disesteem payoffs are, information aggregation fails in large committees: under any majority rule, the committee rejects the innovation almost surely.

Keywords: Committees; Information aggregation; Disesteem payoffs (search for similar items in EconPapers)
JEL-codes: D71 D72 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-cdm, nep-ino and nep-mic
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Over-Caution of Large Committees of Experts (2014)
Working Paper: Over-Caution of Large Committees of Experts (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:wzbeoc:spii2013313

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