Motivated Reasoning and Information Aggregation

Abstract

If agents engage in motivated reasoning, how does that affect the aggregation of information in society? We study the effects of motivated reasoning in two canonical settings - the Condorcet jury theorem (CJT), and the sequential social learning model (SLM). We define a notion of motivated reasoning that applies to these and a broader class of other settings, and contrast it to other approaches in the literature. We show for the CJT that information aggregates in the large electorate limit even with motivated reasoning. When signal quality differs across states, increasing motivation improves welfare in the state with the more informative signal and worsens it in the other state. In the SLM, motivated reasoning improves information aggregation up to a point; but if agents place too little weight on truth-seeking, this can lead to worse aggregation relative to the fully Bayesian benchmark.