Public disagreement
By: [by] Rajiv Sethi [and] Muhamet Yildiz
Contributors: Yildiz, Muhamet; Massachusetts Institute of Technology. Dept. of Economics
Series: Working paper series / Massachusetts Institute of Technology, Dept. of Economics -- working paper 09-03; Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 09-03.
Publisher: Massachusetts Institute of Technology, Dept. of Economics
Published: 2009
Place of publication: Cambridge, MA
Language: eng
Number of pages: 33
Description: Members of different social groups often hold widely divergent public beliefs regarding the nature of the world in which they live. We develop a model that can accommodate such public disagreement, and use it to explore questions concerning the aggregation of distributed information and the consequences of social integration. The model involves heterogeneous priors, private information, and repeated communication until beliefs become public information. We show that when priors are correlated, all private information is eventually aggregated and public beliefs are identical to those arising under observable priors. When priors are independently distributed, however, some private information is never revealed and the expected value of public disagreement is greater when priors are unobservable than when they are observable. If the number of individuals is large, communication breaks down entirely in the sense that disagreement in public beliefs is approximately equal to disagreement in prior beliefs. Interpreting integration in terms of the observability of priors, we show how increases in social integration can give rise to less divergent public beliefs on average. Communication in segregated societies can cause initial biases to be amplified, and new biases to emerge where none previously existed. Even though all announcements are public and all signals equally precise, minority groups members face a disadvantage in the interpretation of public information that results in medium run beliefs that are less closely aligned with the true state. Keywords: bias, belief divergence, common prior, heterogeneous prior, deliberation. JEL Classifications: C72, C73.
Notes: "February 15, 2009."

Includes bibliographical references (leaves 32-33).

Abstract in HTML and working paper for download in PDF available via World Wide Web at the Social Science Research Network.