Rebecca Morton
New York University
Abstract:
We present experiments on information aggregation through majority voting in which subjects can receive misleading signals. We argue that when signals are possibly misleading, majority voting can result in groups making choices inferior to those made by individuals acting alone. We also investigate the interaction between different types of social information and the bias due to misleading signals. We find that voting fails to correct for misleading signals and that group decisions can be biased as a consequence. However, we do not find a significant difference between individual and group decision-making in these cases. Yet, social information on prior choices makes group decision-making worse when signals are misleading. Theoretically, social information on consequences should alleviate the bias due to misleading signals; however, we find that in our experiments subjects appear to ignore such information and it fails to reduce the bias.
Date: November 11, 2011
Time: 03:00 P.M.
Venue:
AMEX Conference Room (Second Floor)
Department of Economics,
Delhi School of Economics,
New Delhi-110007(INDIA)
Location:
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