Faculty
Research: Professor David Austen-Smith, MEDS
Majority
rules
Group
design influences the information that members share, says
David Austen-Smith, who is identifying incentives to speak
the truth
By
Romi Herron
"Do
you swear to tell the truth, the whole truth, and nothing but the truth? "
It's
a phrase Kellogg School Professor David
Austen-Smith says people hear so often in fictional
courtroom dramas that the three parts of the question are
rarely, if ever, considered separately in real life. But
they should be, he says, because they are logically distinct
in important ways that have implications for business leaders
as well as lawyers.
Incentives
to share or suppress information arise in a range of small-group
deliberations, from one-on-one conversations to corporate
committees, juries and Congressional hearings. The factors
behind the half-truths, truth modifications and cheap talk
are the focus of the Earl Dean Howard Distinguished Professor
of Political Economy's current research.
Austen-Smith
says the application of his findings essentially comes down
to this: "You had better be very careful designing
your committees because doing so will affect how decisions
are made. The rules under which people vote influence the
way they speak and what they say," he explains.
An
economist by training, Austen-Smith earned his doctorate
in economics at the University of Cambridge in 1978 and
since then has taught positive political theory, social
choice and microeconomics, while also authoring two books
and more than 50 articles on those topics. His grant work
over the last two and a half decades has been largely focused
on general elections and voting theory. Among other topics,
he's also analyzed informational lobbying, proportional
representation and debate in politics. He joined Northwestern
University in 1996 and renewed his interest in smaller groups
and the influence of voting rules in those settings.
"This
research links to what we teach at Kellogg in corporate
crisis management and values-based leadership. I'm looking
to determine the moving parts that affect communication
choices," Austen-Smith says. "We know everyone
has private information regarding their motives and preferences,
but we don't know what each person's is. The way to influence
people's decisions is to change their beliefs, but to assume
that everyone is going to share this information openly
is not useful."
Comparing
majority rule and unanimity voting rules, Austen-Smith,
in joint work with Professor Tim
Feddersen, chair of the Kellogg Managerial
Economics and Decision Sciences Department, has found
that people are more willing to share their private information
with others in committees that use majority rather than
unanimity rule. Unlike majority rule, unanimity rule gives
each individual veto power. Austen-Smith says that this
ability to enforce the status quo unilaterally can result
in individuals feeling less compelled to share information.
"Majority rule can lead people to reveal more information.
With unanimity, the deliberations will frequently not be
as informed." This result runs counter to a common
intuition that requiring a consensus decision induces people
to share more information and make better arguments.
Is
it a good idea to begin by requiring committee members to
reveal their private interests or biases with respect to
any committee decision? Surprisingly, Austen-Smith and Feddersen's
research does not support this strategy.
"If
I know I am in the minority on a committee, then I have
no reason to share any useful information, since that can
only benefit the majority," says Austen-Smith. "But
if I think I might be in the majority, then I do have a
reason to share what I know with others."
The
Kellogg professor highlights an example of another challenge
in how groups share information — in this case with
the public — by pointing out the selective information
sharing, or truth-filtering, in the tobacco industry's past
communication strategies.
"In
the early days, executives announced research findings to
assure consumers that cigarette smoking did not cause cancer.
The research findings shared may have been accurate, but
the industry also chose not to share its entire research,
which revealed smoking in fact does cause cancer,"
he notes.
The
industry's claims later fell apart when, over the years,
smoking-related cancers increased significantly and third-party
research exposed the industry's initial position as representing
only part of the truth.
Austen-Smith
says that in crisis situations, some decisions to withhold
important facts are made by individuals who mistakenly assume
this omission is what the committee majority prefers. Because
a lack of information shared in deliberations affects the
outcomes reached by committees, Austen-Smith hopes his research
helps business leaders develop tools to gather the whole
truth most effectively.
