TY  - JOUR
AU  - Li,Hao
AU  - Rosen,Sherwin
AU  - Suen,Wing
TI  - Conflicts and Common Interests in Committees
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7158
PY  - 1999
Y2  - June 1999
UR  - http://www.nber.org/papers/w7158
L1  - http://www.nber.org/papers/w7158.pdf
N1  - Author contact info:
Hao Li
997 - 1873 East Mall
Vancouver, BC
V6T 1Z1
E-Mail: lidothao@interchange.ubc.ca

Sherwin Rosen
Department of Economics University of Chicago
1126 East 59th Street
Chicago, IL   60637
Tel: 312-702-8166

Wing Suen
Room 908, K.K. Leung Building
The University of Hong Kong
Pokfulam Road Hong Kong
E-Mail: wsuen@econ.hku.hk
AB  - Committees improve decisions by pooling independent information of members, but promote manipulation, obfuscation, and exaggeration of private evidence when members have conflicting preferences. We study how self-interest mediates these conflicting forces. When members' preferences differ, no person ever submits a report that allows perfect inference of his private information. Instead, equilibrium strategies are many-to-one mappings that transform continuous data into ordered ranks: voting procedures are the equilibrium methods of achieving a consensus in committees.  Voting necessarily coarsens the transmission of information among members, but is necessary to control conflicts of interest. The degree of coarseness of the equilibrium voting procedure is determined by the extent of conflicting preferences. Though self-interests necessarily reduce the efficient use of information in committees, real information sharing occurs nonetheless. Committees make better decisions on behalf of the  average' (Pareto weighted) member than would any individual on the basis of own information. Committees are viable, though imperfect ways of making decisions when information is dispersed among members.
ER  -