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Time to decide: information search and revelation in groups

Campbell, Arthur, Ederer, Florian and Spinnewijn, Johannes (2011) Time to decide: information search and revelation in groups. In: STICERD Economic Theory Seminars, 30 June 2011, London School of Economics and Political Science, London, UK. (Unpublished)

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Abstract

We analyze costly information acquisition and information revelation in groups evaluating dif- ferent decision options in a dynamic setting. Even when group members have perfectly aligned interests the group may ine¢ ciently delay decisions. When deadlines are absent or far, unin- formed group members freeride on each others efforts to acquire information. When deadlines come close, successful group members stop revealing their information in an attempt to incen- tivize others to continue searching for information. Surprisingly, setting a tighter deadline may increase the expected decision time and increase the expected accuracy of the decision in the unique equilibrium. As long as the deadline is set optimally, welfare is higher when information is only privately observable to the agent who obtained information rather than to the entire group.

Item Type: Conference or Workshop Item (Lecture)
Official URL: http://sticerd.lse.ac.uk/
Additional Information: © 2011 The Authors
Library of Congress subject classification: H Social Sciences > HB Economic Theory
Journal of Economic Literature Classification System: D - Microeconomics > D7 - Analysis of Collective Decision-Making > D71 - Social Choice; Clubs; Committees; Associations
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search; Learning; Information and Knowledge; Communication; Belief
H - Public Economics > H4 - Publicly Provided Goods > H42 - Publicly Provided Private Goods
Sets: Departments > Economics
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 24 Feb 2012 10:19
URL: http://eprints.lse.ac.uk/42024/

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