Lecture by Berno Buechel (University of St. Gallen, Institute of Economics (FGN)) in DeCAn lab

We study private communication between jury members who have to decide between two policies in a majority vote. While interests of all agents are perfectly aligned, only some agents (“experts”) receive a private noisy signal about which policy is correct. Each expert can, but need not, recommend a policy to her audience of “non-experts” prior to the vote. We show theoretically and empirically that communication can undermine (informational) efficiency of the vote and hence reduce welfare. Both efficiency and stability of communication hinge on the structure of the communication network. If some experts have distinctly larger audiences than others, non-experts should not follow their voting recommendation. We test the model in a lab experiment and find supporting evidence for this effect and, more generally, for the importance of the network structure.