Open AccessCostly verification in collective decisions
Author(s) -
Erlanson Albin,
Kleiner Andreas
Publication year - 2020
Publication title -
theoretical economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 4.404
H-Index - 32
eISSN - 1555-7561
pISSN - 1933-6837
DOI - 10.3982/te3101
Subject(s) - principal (computer security) , status quo , voting , microeconomics , majority rule , baseline (sea) , mechanism (biology) , computer science , mechanism design , economics , computer security , artificial intelligence , political science , law , philosophy , epistemology , politics , market economy
We study how a principal should optimally choose between implementing a new policy and maintaining the status quo when information relevant for the decision is privately held by agents. Agents are strategic in revealing their information; the principal cannot use monetary transfers to elicit this information, but can verify an agent's claim at a cost. We characterize the mechanism that maximizes the expected utility of the principal. This mechanism can be implemented as a cardinal voting rule, in which agents can either cast a baseline vote, indicating only whether they are in favor of the new policy, or make specific claims about their type. The principal gives more weight to specific claims and verifies a claim whenever it is decisive.