Polarization in Group Interactions

We study the phenomenon of strategic polarization in group interactions. Agents with private preferences choose a public action (e.g., voice opinions), and the mean of their actions represents the group’s realized outcome. They face a trade-off between influencing the group outcome and truth-telling. In equilibrium, agents strategically shade their actions towards the extreme leading to polarization. The group outcome is also more extreme than the mean preference. Compared to a simultaneous actions game, randomized (or exogenous) sequential actions lowers polarization when agents’ preferences are relatively similar. Endogenizing the order of moves always increases polarization, though it is also welfare enhancing.