Information aggregation in debate: who should speak first?

Ottaviani, Marco; Sørensen, Peter Birch

doi:10.1016/s0047-2727(00)00119-5

Cited by 184 publications

(149 citation statements)

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“…This implies that such beliefs for the evaluator cannot be sustained, for any q. Consequently, there is an upper bound on the cutoff point. 16 Finally, note that in terms of the objectives of the decision maker, career concerns are an important condition; in particular, the distortion becomes smaller when the reputation motive decreases, and in the limit, when career concerns vanish, the decision maker behaves efficiently. Moreover, the Proposition illustrates that anti-herding arises when the decision maker is solely motivated by career concerns, i.e., even in the absence of outcome concerns.…”

Section: Proofmentioning

confidence: 99%

“…Proof: see the appendix.¥ 16 The feature that p * is bounded for all values of q will turn out to be important, since it implies that when q is high enough anti-herding must arise in an informative equilibrium, even if we change some of the assumptions of the model. 17 Prendergast and Stole (1996) assume the existence of outcome concerns in order to derive a fully separating equilibrium.…”

Section: Proofmentioning

confidence: 99%

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Anti-herding and strategic consultation

Levy

2004

European Economic Review

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In this paper I analyze how careerist decision makers aggregate and use information provided by others. I find that decision makers who are motivated by reputation concerns tend to 'anti-herding', i.e., they excessively contradict public information such as the prior or others' recommendations. I also find that some decision makers may deliberately act unilaterally and not consult advisers although advice is costless.Moreover, advisers to the decision maker may not report their information truthfully.Even if the advisers care only about the outcome, they bias their recommendation since they anticipate inefficient anti-herding behavior by the decision maker.JEL Classification Numbers: D82; D83.

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Section: Proofmentioning

confidence: 99%

Section: Proofmentioning

confidence: 99%

Anti-herding and strategic consultation

Levy

2004

European Economic Review

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“…In seniority, undercon…dence cannot occur in position 2 because obeying the prediction of the subject in position 1 and ignoring his or her private signal is always consistent with Bayesian posterior. Overcon…dence and undercon…dence certainly exist in anti-seniority whereas only overcon…dence occurred frequently in position 2 and deviations are rarely observed in the other positions in seniority 13 .…”

Section: Analysis Of Deviationmentioning

confidence: 95%

Signal Qualities, Order of Decisions, and Informational Cascades: Experimental Evidences

Sasaki

2004

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThis paper reports the results of informational cascades experiments where two di¤erent decision-making systems, anti-seniority and seniority are investigated. By implementing heterogeneous signal qualities associated with the …xed order of decisions I compare the property of each system and examine heuristics human subjects use. Major …ndings are the following: (1) complete cascades occur more frequently in seniority than in anti-seniority, (2) seniority is more e¢cient than anti-seniority, but it increases the risk for creating negative cascades, (3) for both systems, rational complete cascades occur less frequently than those which the Bayesian theory predicts, (4) subjects in seniority put equal weight on private signals and on predecessors' predictions whereas those who in anti-seniority put more weight on private signals than on predecessors' predictions, (5) by analyzing deviations from Bayesian posteriors, both overcon…dence and undercon…dence are identi…ed, and (6) the anchoring e¤ect is veri…ed in deviations by overcon…dence, but is not veri…ed in deviations by undercon…dence.

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“…Institutional rules and compensation contracts can be designed to manage herding and information cascades in project choice (See Prendergast (1993), Khanna (1997), and Khanna and Slezak (2000) (discussed below); see also Ottaviani and Sorenson (2001). )…”

Section: Exogenous Rules Versus Endogenous Contracts and Institutionamentioning

confidence: 99%

Thought and Behavior Contagion in Capital Markets

Hirshleifer

Teoh

2009

Handbook of Financial Markets: Dynamics and Evolution

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aPrevailing models of capital markets capture a limited form of social influence and information transmission, in which the beliefs and behavior of an investor affect others only through market price, information transmission and processing is simple (without thoughts and feelings), and there is no localization in the influence of an investor on others. In reality, individuals often process verbal arguments obtained in conversation or from media presentations, and observe the behavior of others. We review here evidence concerning how these activities cause beliefs and behaviors to spread, affect financial decisions, and affect market prices; and theoretical models of social influence and its effects on capital markets. Social influence is central to how information and investor sentiment are transmitted, so thought and behavior contagion should be incorporated into the theory of capital markets.

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Information aggregation in debate: who should speak first?

Cited by 184 publications

References 30 publications

Anti-herding and strategic consultation

Anti-herding and strategic consultation

Signal Qualities, Order of Decisions, and Informational Cascades: Experimental Evidences

Thought and Behavior Contagion in Capital Markets

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