COWLES FOUNDATION FOR RESEARCH IN
ECONOMICS Box 208281
COWLES FOUNDATION DISCUSSION PAPER NO. 864 "Common Knowledge of Summary Statistics" Adam Brandenburger and John Geanakoplos February 1988 Consider a group of people who are asked to offer their opinions on some issue. "Business confidence" surveys are an example: groups of businessmen are often asked for their predictions of economic indicators such as growth or inflation rates. Each member of the group makes a prediction based on his or her private information, and the average prediction is then publicly announced. If the members of the group are then allowed to revise their opinions, based on whatever information they glean from the public announcement, is there any tendency for the opinions in the group to converge on a common, consensus opinion? In this note we show that under certain conditions the answer to this question is yes. JEL Classification: 213, 025 Keywords: Common knowledge, public opinion, group behavior |
