Report

Teaser, summary, work performed and final results

Periodic Reporting for period 3 - InfoAggregation (Information Aggregation in Elections)

Teaser

Elections are the foundation for democratic decision making. This research program examines the effects of biased and privately informed entities—election organizers—on the ability of elections to aggregate information: Existing theory demonstrates that large electorates...

Summary

Elections are the foundation for democratic decision making. This research program examines the effects of biased and privately informed entities—election organizers—on the ability of elections to aggregate information: Existing theory demonstrates that large electorates can reach correct decisions by aggregating information dispersed among many voters. However, existing theory does not account for the ubiquitous presence of biased organizers who intend to affect the election outcome. Examples of biased organizers may include a CEO holding a shareholder vote, a regional government holding a referendum, and political parties in general elections. This project develops and analyzes new models of voting that account for the effects of biased organizers on information aggregation. I am interested in whether elections are still effective instruments of collective choice in the presence of “biased organizers.” If they are not, then how can we design elections in a robust way? I am particularly interested in the possibilities of manipulating elections by manipulating the number of voters and the information they have (“persuasion”). A particularly salient application is shareholder voting as an element of corporate control.

Work performed

The focus at the beginning of this project was my work on information aggregation in elections in which the number of voters is state-dependent. We use this model to study the possibility of a biased organizer to manipulate elections by deliberately choosing the number of voters depending on the underlying state. In collaboration with my co-author, Mehmet Ekmekci, I have extended and revised preliminary work on the topic. We have studied, in particular, elections in which the number of voters is Poisson distributed, building on previous work by Roger Myerson. This part is related to my work on information aggregation in auctions in which the number of bidders is uncertain and state-dependent.

Over time, I also started working on information aggregation in the presence of an informed adversarial sender. In collaboration with my co-author and student, Carl Heese, I have developed a theory of persuasion in elections in which voters are heterogeneous and have access to other information.

Finally, I have started to study non-binding elections more recently in collaboration with Mehmet Ekmekci. Such elections are particularly relevant in the context of shareholder voting because shareholder votes are typically not binding for the management. Thus, we study whether elections still aggregate information even if the decision maker does not commit to a particular outcome as a function of the election outcome. We are especially interested in the role of participation costs as a screening instrument. Other important applications are polls, petitions, and protests.

Final results

All three subprojects extend existing theory beyond the current state of the art. The first considers state-dependent electorates and its endogenous emergence. The second considers persuasion when receivers have private information about their own preferences and the relevant state of the world. The third considers informal elections and the role of participation costs. In each case, I hope to have constructed and solved by the end of the project a new class of models of elections that provide us with a better understanding of the effectiveness of elections in aggregating dispersed information in a variety of contexts.