On Information Aggregation in International Alliances

Abstract

I study incentives for information transmission and collective decision-making between multiple players in an alliance. Within an alliance, i) players have private information; ii) actions exhibit substitutability; iii) action sets are constrained; and iv) preferences are heterogeneous. The main result derives conditions for full information aggregation under any public communication protocol. Full information revelation ensues as long as players' biases are sufficiently cohesive with respect to constraints on the action set. I derive precise conditions on the minimal action set under full information revelation. Differences in the size of action sets across players is exacerbated by two variables: i) individual biases over outcomes, and ii) degree of interdependence between the actions of players. The results are discussed in the context of collective decision-making in international organizations and climate change alliances.