Delay in Strategic Information Aggregation

We study a model of collective decision making in which divergent preferences of the agents make information aggregation impossible in a single round of voting. With costly delay, we show that repeated voting can help the agents reach a mutually preferred decision, even though there is no new direct information about the decision between two rounds of voting. An increase in the cost of delay can improve the efficiency of information aggregation, and hence the ex ante welfare of the agents involved, by encouraging the agents to be more forthcoming with their private information in the initial rounds of voting. Allowing an additional round of voting in case of disagreements can similarly improve the ex ante welfare when there is an intermediate degree of conflict, but reduces the welfare otherwise. With sufficiently many rounds of voting allowed, the equilibrium play of the repeated voting game involves gradually increasing concessions. Notes. This is a preliminary draft. Please do not circulate without permission. Suen and Li thank Guanghua School of Management of Beijing University, and especially the Department of Applied Economics and its chair Hongbin Cai, for their hospitality and research support during their visit. Li wishes to thank the Marshall School of Business of the University of Southern California for hosting his sabbatical when part of the research for this paper is done. – i – presented by Li, Hao FRIDAY, Oct. 26, 2007 1:30 pm – 3:00 pm, Room: HOH-706 USC FBE APPLIED ECONOMICS WORKSHOP