Template-type: ReDIF-Paper 1.0
Author-Name: Bruno Strulovici
Author-Email: bruno.strulovici@nuffield.ox.ac.uk
Author-Workplace-Name: Nuffield College, Oxford University
Title: Learning while voting: determinants of collective experimentation
Abstract:  This paper analyzes collective decision making when individual preferences evolve through learning.
Votes are affected by their anticipated effect on future preferences. The analysis is conducted in a two-arm 
bandit model with a safe alternative and a risky alternative whose payoff distribution, or “type”, varies across 
individuals and may be learned through experimentation. Society is shown to experiment less than any of its 
members would if he could dictate future decisions, and to be systematically biased against experimentation 
compared to the utilitarian optimum. Control sharing can even result in negative value of experimentation: 
society may shun a risky alternative even its expected payoff is higher than the safe one’s. Commitment to a
fixed alternative can only increase efficiency if aggregate uncertainty is small enough. Even when types are 
independent, a positive news shock for anyone raises everyone’s incentive to experiment. Ex ante preference 
correlation or heterogeneity reduces these inefficiencies.
Length: 45 pages
Creation-Date: 2008-30-05
Number: 2008-W08
File-URL: http://www.nuffield.ox.ac.uk/economics/papers/2008/w8/VotEx%2008May30%202.pdf
File-Format: application/pdf
Handle: RePEc:nuf:econwp:0808