Costly Communication and Group Decision Making

I develop a novel model of team/committee decision making in which communication is costly in two directions: agents must pay costs to send messages to one another, but also to receive messages sent by others. Agents are heterogeneous only in the quality of the information they possess, and preferences are directly aligned over outcomes. Equilibrium strategies are intuitively characterized by a double cutoff: a confidence-level above which to speak, and a confidence-level below which to listen. However, freeriding on the messages of others leads to less sending and listening than the optimal level. The model is implemented in the laboratory and the decisions of subjects contrasted with the theoretical predictions of the model. Of interest is the behavioral finding that subjects are more sensitive to listening costs than sending costs, and there is a large under-attribution of information content to messages sent by other participants.