The pivotal mechanism revisited: some evidence on group manipulation
AbstractThis paper studies the vulnerability of the pivotal mechanism with respect to manipulation by groups. In a lab experiment, groups decide on the implementation of various alternatives, some of which imply opposite interests for the two subgroups. We investigate the occurrence of tacit and explicit collusion by allowing for communication within subgroups in one treatment and prohibiting it in another. Even though all agents’ preferences are common knowledge and there exists a simple symmetric collusive strategy for one subgroup, we find little evidence for tacit collusion. Only when explicit communication is allowed, collusion is established. A behavioral model using quantal response equilibrium in which subjects have beliefs over the correlation of errors of same-type subjects helps explain the main features of our data. Copyright Economic Science Association 2013
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Bibliographic InfoArticle provided by Springer in its journal Experimental Economics.
Volume (Year): 16 (2013)
Issue (Month): 1 (March)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=102888
Collective decision making; Pivotal mechanism; Collusion; Communication; QRE; D71; D61; C92;
Other versions of this item:
- Anita Gantner & Wolfgang Höchtl & Rupert Sausgruber, 2011. "The Pivotal Mechanism Revisited: Some Evidence on Group Manipulation," Working Papers 2011-15, Faculty of Economics and Statistics, University of Innsbruck.
- D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
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