Information manipulation and majority rule

This paper studies endogenous institution in the presence of information manipulation. We show majority rule discourages information manipulation, reducing Type II errors in collective decision-making. In equilibrium, the optimal majority rule strategically balances the reduction in Type II errors associated with discouraging information manipulation with the potential increase in Type I errors. When it comes to green environmental issues, member countries often adopt a majority rule voting system. This is because these issues typically involve high inherent risks that affect all countries on a global scale, and low heterogeneity among members in terms of the desire to address these challenges.