Committee Design with Endogenous Information

TLDR: In this article, the authors focus on the arrangements for collective decision making in a world where agents must be motivated to acquire information and identify some basic forces shaping the design of panels of decision makers-referees, managers, jurors, etc.

Abstract: This paper is concerned with the arrangements for collective decision making in a world where agents must be motivated to acquire information. The analysis identifies some basic forces shaping the design of panels of decision makers-referees, managers, jurors, etc.-in situations where decision makers are useful only in so far as they expend some effort to gain information about the alternatives at hand. These situations are common, one being the refereeing process, where an editor requires the opinions of a number of experts who must read the paper (acquire information) in order to give an opinion as to publication. Analogously, in committees which screen applicants to a programme, the committee members must gain information about the applicant's qualifications and likelihood of success in order to evaluate whether to admit him/her. Finally, in trial juries it is important that jurors pay attention to the evidence in order to make an informed judgement.1 We focus on environments where information is a public good in the sense that the social benefits of one decision maker acquiring information exceed the private benefits. A good mechanism in this environment must not only aggregate information efficiently, but also induce the decision makers to acquire information. We analyse the design of voting mechanisms. Our problem is to choose two parameters which determine both the incentive to acquire information and the efficiency with which information is aggregated. The first parameter is the size of the decision-making unit: the number of committee members. The second is the plurality required to overturn the status quo: the voting rule. Our main result is this: a voting rule that requires a large plurality (in the extreme, unanimity) to upset the status quo can be optimal only if the information available to each committee member is sufficiently accurate. When individual information is noisy, the drawback