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Speed and quality of collective decision making: Incentives for information provision

Author

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  • Grüner, Hans Peter
  • Schulte, Elisabeth
Abstract
We study a one-shot information aggregation problem in which agents have to provide effort in order to understand the information they are supposed to process. Agents have a common interest in reaching a good decision but suffer from an individual cost of providing effort. Showing that any problem which is incentive compatible for a single information processor is incentive compatible for a decentralized organization, but not vice versa, we derive a new rationale for decentralized information processing. For a class of problems, the fastest organization - the reduced tree proposed by Radner (1993) - yields also the best incentives for information processing.

Suggested Citation

  • Grüner, Hans Peter & Schulte, Elisabeth, 2010. "Speed and quality of collective decision making: Incentives for information provision," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 734-747, December.
    • Handle: RePEc:eee:jeborg:v:76:y:2010:i:3:p:734-747
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    Cited by:

    1. Grüner, Hans Peter, 2007. "Protocol Design and (De-)Centralization," CEPR Discussion Papers 6357, C.E.P.R. Discussion Papers.
    2. Schulte, Elisabeth & Peter Gruner, Hans, 2007. "Speed and quality of collective decision making: Imperfect information processing," Journal of Economic Theory, Elsevier, vol. 134(1), pages 138-154, May.
    3. Grüner, Hans Peter, 2009. "Information technology: Efficient restructuring and the productivity puzzle," Journal of Economic Behavior & Organization, Elsevier, vol. 72(3), pages 916-929, December.
    4. Grüner, Hans Peter, 2007. "Information Technology, Efficient Restructuring and the Productivity Puzzle," CEPR Discussion Papers 6109, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    Information processing Hierarchies Incentives for information provision;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • P51 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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