University of Illinois at Urbana-Champaign
214 David Kinley Hall
1407 W. Gregory
Urbana, Illinois 6180
Microeconomic theory, mechanism design, market design, mathematical and computational economics.
Mechanisms for Making Accurate Decisions in Biased Crowds
This paper studies mechanisms for finding the true answer to a binary question using the opinions of biased agents. Taking majority rule as a baseline, I study peer-prediction decision rules, which ask agents to predict the opinions of others in addition to providing their own. Incorporating first-order beliefs into the decision rule has the potential to recognize the correct answer even when the majority is wrong. However, I show the majority rule is essentially the only deterministic, neutral, anonymous, and interim dominance solvable mechanism. I then characterize all randomized peer-prediction mechanisms with these properties, using this result to show majority rule is the optimal mechanism in this class. Finally, I consider a simple, non-incentive-compatible decision rule based on the median prediction that implements majority rule when all agents are strategic and improves on majority rule when an unknown subpopulation is honest.