Voting in large committees with disesteem payoffs: A 'state of the art' model

In this paper, we consider a committee of experts that decides whether to approve or reject a proposed innovation on behalf of society. In addition to a payoff linked to the correctness of the committee’s decision, each expert receives disesteem payoffs if either he/she votes in favor of an ill-fated innovation (a type I error) or votes against an innovation that proves to be beneficial (a type II error). We find that the predictions of the model are sensitive to the assumed signal technology. The standard Condorcet framework assumes that experts’ signals are i.i.d. conditional on the state of the world, implying that the state of the world is approximated with arbitrary precision by a sufficiently large number of signals. Surprisingly, with this assumption, any combination of disesteem payoffs leads to large committees accepting the innovation with too high a probability. However, if this assumption is relaxed, then depending on the relative size of the disesteem payoffs the committee may accept or reject the innovation with too high a probability.