Common value elections with private information and informative priors: Theory and experiments

Abstract

We study efficiency and information aggregation in common value elections with continuous private signals and informative priors. We show that small elections are not generally efficient and that there are equilibria where some voters vote against their private signal even if it provides useful information and abstention is allowed. This is not the case in large elections, where the fraction of voters who vote against their private signal tends to zero. In an experiment, we then study how informativeness of priors and private signals impact efficiency and information aggregation in small elections. We find that there is a substantial amount of voting against the private signal. Moreover, while most experimental elections are efficient, we find that it is not generally the case that better private information leads to better decisions.

Stress-testing the runoff rule in the laboratory

“…The only difference is that when priors are too asymmetric superiority of the runoff rule compared to the plurality rule can only be established in weak -and no longer in strict-terms as coordination to the ex-ante most likely state of the world becomes, trivially, quite profitable. For more details regarding the effect of having uneven priors one is referred to Kawamura and Vlaseros (2017), and Mengel and Rivas (2017). We consider two voting rules: plurality and runoff voting.…”

Against All Odds: Tentative Steps toward Efficient Information Sharing in Groups

“…If public and private information is available, members of a group can, for example, be prone to updating biases. In Mengel et al [23], inefficiencies arise because subjects trust available expert information too much and then vote too often against their signal. In Kawamura et al [24], subjects are locked in a situation where they vote too often for their own uninformative signal rather than abstain.…”