We introduce the prediction value (PV) as a measure of players' informational importance in probabilistic TU games. The latter combine a standard TU game and a probability distribution over the set of coalitions. Player i's prediction value equals the difference between the conditional...

A committee makes a decision on a project on behalf of the public. Members of the committee agree on the a priori value of the project, and hold additional private information about its consequences. They are experts who care about the value of the project and about being considered well...

Some committees are made up of experts, persons interested in both the (subject) matter at hand and in coming across as able decision-makers. Such committees would like to conceal disagreement from the public. We present a theory that describes the reaction of experts to the requirement to...

Transparent decision-making processes are widely regarded as a prerequisite for the working of a representative democracy. It facilitates accountability, and citizens may suspect that decisions, if taken behind closed doors, do not promote their interests. Why else the secrecy? We provide a...

This paper investigates the optimal design of incentives when agents distort probabilities. We show that the type of probability distortion displayed by the agent and its degree determine whether an incentivecompatible contract can be implemented, the strength of the incentives included in the...

We analyze communication about the social returns to investment in a public good. We model two agents who have private information about these returns as well as their own taste for cooperation, or social preferences. Before deciding to contribute or not, each agent submits an unverifiable...

Health shocks are among the most important unprotected risks for microfinance clients, but the take-up of micro health insurance typically remains limited. This pa- per attributes low enrollment rates to a social dilemma. Our theory is that in jointly liable groups, insurance is a public good....

This paper proposes a new measure for a group's ability to lead society to adopt their standard of behavior, which in particular takes account of the time the group takes to convince the whole society to adopt their position. This notion of a group's power to initiate action is computed as the...

This paper develops a novel approach to the economic evaluation of public policies: participatory value evaluation (PVE). PVE involves citizens directly in decisions of the government, taking into account governmental and individual budget constraints. Citizens receive reliable information on...

Cost-Benefit Analysis (CBA) for public policies assumes ‘consumer sovereignty’, implying that impacts of government projects can be expressed in monetary terms by aggregating individuals’ willingness to pay. However, individuals’ willingness to pay might not accurately reflect...