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Does decentralization of decisions increase the stability of large groups?

Author

Listed:
  • Tjaša Bjedov

    (Swiss Distance Learning University)

  • Simon Lapointe

    (VATT Institute for Economic Research)

  • Thierry Madiès

    (University of Fribourg)

  • Marie Claire Villeval

    (Univ Lyon, CNRS, GATE Lyon St Etienne
    IZA)

Abstract

Using a laboratory experiment with nested local and global public goods, we analyze the stability of global groups when individuals have the option to separate, according to the degree of decentralization of decision-making. We show that increasing the number of decisions made at the local level within a smaller group reduces the likelihood that individuals vote in favor of a configuration that includes no global good for interacting only within their local group. Voting for such a configuration is more likely when global group members are less cooperative and local group members are more cooperative. Reinforcing local group identity has no impact on votes.

Suggested Citation

  • Tjaša Bjedov & Simon Lapointe & Thierry Madiès & Marie Claire Villeval, 2018. "Does decentralization of decisions increase the stability of large groups?," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 51(4), pages 681-716, December.
    • Handle: RePEc:spr:sochwe:v:51:y:2018:i:4:d:10.1007_s00355-018-1133-5
    DOI: 10.1007/s00355-018-1133-5
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    More about this item

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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