The Condorcet Jury Theorem with Information Acquisition

We analyze a committee decision in which individuals with common preferences are uncertain which of two alternatives is better for them. Members can acquire costly information. Private signals and information choice are both continuous. As is consistent with Down’s rational ignorance hypothesis, each member acquires less information in a larger committee and tends to acquire zero information when the committee size goes to infinity. However, with more members, a larger committee can gather more aggregate information in equilibrium. The aggregate information is infinite with the size going to infinity if and only if marginal cost at “zero information acquisition” is zero. When the marginal cost at “zero information acquisition” is positive, the probability of making an appropriate decision tends to be less than one.

Democratic Remedies If Ignorance Threatens Democracy

Darby correctly argues that ordinary people often have more or better knowledge about some political matters than do elites, and that deficiencies in their knowledge can be addressed by creating conditions, typically material, that would provide them with opportunities to gain relevant knowledge. This constitutes an important locus for democratic experimentalism, yielding a democratic form of epistocracy. Any residual gaps in knowledge could then be treated as rational ignorance, a willingness to delegate—though not irrevocably— decisions to those who have greater knowledge.

Post-grant patent review in China: an empirical analysis

With a series of policies to stimulate innovation and patent activities, China has become a world leader in both patent applications and patent litigation. These major developments, together with the escalated US-China trade tensions, have made China an integral but controversial venue for international patent protection. The Chinese patent system, especially its detailed practice and cases, is in need of a comprehensive empirical study. This article analyzed 8766 Chinese patent invalidity cases decided between 2014 and 2016, which, together with my prior work on patent infringement lawsuits, offers a comprehensive picture on how the bifurcated patent system in China works. First, it found that only a small number, about 2.0 percent, of Chinese patents are ever subject to infringement or invalidity disputes, shedding light on the patent office's rational ignorance of a patent's validity at first place. Second, it found that the invalidity rate for invention patents in China (54.6%) was lower than in many other countries, such as the US (83.9%) and Germany (73%), indicating that the Chinese patent system is more pro-patentee than once believed. Third, it raised the question of Chinese patents’ quality based on various characteristics of these cases, including patent types and petitioners’ entity status.

An Investigation of Beliefs, Information and the Halo Effect in Electoral Decision Making

Rational ignorance suggests that voters largely ignore a lot of information while voting due to the high cost of attaining and processing the information. It is further suggested that rational voters do not vote to affect election results but to express opinions. It is thus likely that cognitive biases shape electoral decision-making. The Halo effect, for instance, extrapolates information in one domain to another and helps voters avoid processing extra information. In this paper, we investigate the conditions under which extra information is processed or ignored, and first impressions are generalised. We find, through a Randomised Control Experiment, that new and weakly formed political beliefs also have effects like strongly held political beliefs, on information provided later. In particular, the study presented picture-information about candidates, either accompanying or not accompanying text-information. Additional text-information did not significantly change voter-choice when the text information reaffirmed picture-based preferences but did significantly change voter-choice when it contradicted picture-based preferences. These results are viewed from the perspective of both the Identity-Protective Cognition Thesis and the Halo effect, thus hinting that the two may be connected, an insight that is largely missing in the previous literature.

Crafting Intellectual Property Rights: Implications for Patent Assertion Entities, Litigation, and Innovation

We show that examiner-driven variation in patent rights leads to quantitatively large impacts on several patent outcomes, including patent value, citations, and litigation. Notably, Patent Assertion Entities (PAEs) overwhelmingly purchase patents granted by “lenient” examiners. These examiners issue patents that are more likely to be litigated by both PAEs and conventional companies, and that also have higher invalidity rates. PAEs leverage a specific friction in the patent system that stems from lenient examiners and affects litigation more broadly. These patterns indicate that there is much at stake during patent examination, contradicting the influential “rational ignorance” view of the patent office. (JEL K11, K41, O31, O34, O38)

Voting with Your Brain or Heart, Hands or Feet? An Enquiry in the Microeconomics of Intra- and Inter- National Political Competition

This paper is an interdisciplinary analysis of the benefits and limits of political competition. We start from the economic theory of monopoly and extend its implications on matters concerning political action. If the state is defined as the institution that holds the monopoly on coercion over a given territory, are the democratic selection process (internal political competition) and the possibility open to an economic agent to leave for more economically free jurisdictions (international political competition) enough to temper its reach? By referring to the inherent limits that plague collective action, voter rational ignorance, and the possibility of redistributing benefits and incumbent decision-maker collaboration when it comes to trading votes, we argue that democratic competition cannot be considered an effective restraint against political discretion. Because of this, we consider that international political competition can offer better protection against political action. However, even the possibility of voting with one’s feet or observing the political milieu in another territory become manageable if political decision-makers decide to collude at the international level. Also, emigration is an economically costly and psychologically exacting decision that ultimately implies choosing between two state-controlled jurisdictions. Therefore, even the choice of voting with one’s feet is a second-best solution that, in practice, might not prove to be an effective restraint on the state’s monopoly discretion.

Obstacles to Achieving the Purpose of Business

Chapter 6 looks at several problems businesses can face in the achievement of their proper goal within a market economy. These include Karl Marx’s notions of “alienation,” lying, and exploitation, the extent to which markets and commercial society can conflict with some of our deep-seated and possibly pretheoretic intuitions, and problems associated with asymmetries of knowledge and so-called rational ignorance. This chapter outlines how businesses should deal with such worries and address them in good faith. It also articulates a claim about the proper scope of business’s moral obligations, which will go some way toward helping businesses focus not only on what they can do but on what they should do.

Information Cues and Rational Ignorance

This chapter addresses the role of cue taking by citizens. Cue taking is a way to answer the question: can democracy work when most of the public is rationally ignorant? The cue-taking literature gives a resounding “yes” as an answer to this question. This chapter elaborates upon the reasons for this answer and the conditions under which it holds. There are, however, reasons to be cautious in being too optimistic about this answer. While cue-taking behavior is both present and helpful, it is not infallible. The chapter also notes the times when cue-taking behavior does not really allow one to say that it is a panacea so far as democratic decision making is concerned.