Information Aggregation and Group Decisions∗

Individuals with identical preferences each receive a signal about the unknown state of the world and separately decide upon a utilitymaximizing recommendation on the basis of that signal. The group’s decision maximizes the common utility function based on perfect pooling of individual information. With no restrictions on the information structure, the individual recommendations place no constraints on the group’s decision. In a monotone environment in which individuals receive conditionally independent signals, the paper presents conditions under which polarization does and does not arise. Journal of Economic Literature Classification Numbers: A12, D01;