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Conformity Preferences and Information Gathering Effort in Collective Decision Making

Author

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  • Ding Huihui

    (GREThA, Université de Bordeaux, avenue Léon Duguit, 33608 Pessac cedex, France)

Abstract
Our study concerns a collective decision-making model for the collection of information from two voters. Both voters, who tend to make the same voting choices because of their conformity preferences, collect information about the consequences of a project and then vote on the project. We focus on an informative equilibrium in which voters vote informatively using pure strategies. This is a symmetric Nash equilibrium. Our result is interesting as it shows that nonconformist voters exert less effort from a social perspective because of a positive externality that results in the free-rider problem, while conformity preferences can help to improve the sum of the voters’ expected payoffs from the social perspective. This is because conformity preferences may alleviate the free-rider problem associated with coordination (making the same vote). Specifically, conformity preferences give special importance to the correlation between voters’ signals, even if this correlation is unrelated to the accuracy of the signals. Furthermore, we present the exact conformity preference level which helps voters to exert an optimal effort level that maximizes the sum of the voters’ expected payoffs compared to the nonconformist case. In addition, we graphically illustrate comparative statics on effort levels in informative equilibria.

Suggested Citation

  • Ding Huihui, 2018. "Conformity Preferences and Information Gathering Effort in Collective Decision Making," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 18(1), pages 1-18, January.
  • Handle: RePEc:bpj:bejtec:v:18:y:2018:i:1:p:18:n:15
    DOI: 10.1515/bejte-2016-0136
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    References listed on IDEAS

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    1. Cooper, David J. & Rege, Mari, 2011. "Misery loves company: Social regret and social interaction effects in choices under risk and uncertainty," Games and Economic Behavior, Elsevier, vol. 73(1), pages 91-110, September.
    2. Angela A. Hung & Charles R. Plott, 2001. "Information Cascades: Replication and an Extension to Majority Rule and Conformity-Rewarding Institutions," American Economic Review, American Economic Association, vol. 91(5), pages 1508-1520, December.
    3. Otto H. Swank & Phongthorn Wrasai, 2002. "Deliberation, Information Aggregation and Collective Decision Making," Tinbergen Institute Discussion Papers 02-006/1, Tinbergen Institute, revised 03 Dec 2002.
    4. Amihai Glazer, 2008. "Voting to anger and to please others," Public Choice, Springer, vol. 134(3), pages 247-254, March.
    5. Bardsley, Nicholas & Sausgruber, Rupert, 2005. "Conformity and reciprocity in public good provision," Journal of Economic Psychology, Elsevier, vol. 26(5), pages 664-681, October.
    6. Callander, Steven, 2008. "Majority rule when voters like to win," Games and Economic Behavior, Elsevier, vol. 64(2), pages 393-420, November.
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    More about this item

    Keywords

    normative conformity preferences; information gathering effort; collective decision making;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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