IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_3732.html
   My bibliography  Save this paper

Voting in Small Committees

Author

Listed:
  • Paolo Balduzzi
  • Clara Graziano
  • Annalisa Luporini

Abstract

A small committee has to approve/reject a project with uncertain return. Members have different preferences: some are value-maximizers, others are biased towards approval. We focus on the efficient use of scarce information when communication is not guaranteed, and we provide insights on the optimal committee composition. We show that the presence of biased members can improve the voting outcome by simplifying the strategies of unbiased members. Thus, heterogeneous committees perform at least as well as homogeneous committees. In particular, when value-maximizers outnumber biased members by one vote, the optimal equilibrium becomes unique. Finally, allowing members to communicate brings no improvement.

Suggested Citation

  • Paolo Balduzzi & Clara Graziano & Annalisa Luporini, 2012. "Voting in Small Committees," CESifo Working Paper Series 3732, CESifo.
    • Handle: RePEc:ces:ceswps:_3732
    as

    Download full text from publisher

    File URL: https://www.cesifo.org/DocDL/cesifo1_wp3732.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Christopher Spencer, 2006. "The Dissent Voting Behaviour of Bank of England MPC Members," School of Economics Discussion Papers 0306, School of Economics, University of Surrey.
    2. Piketty, Thomas, 1999. "The information-aggregation approach to political institutions," European Economic Review, Elsevier, vol. 43(4-6), pages 791-800, April.
    3. Jan Marc Berk & Beata Bierut, 2004. "On the Optimality of Decisions," Tinbergen Institute Discussion Papers 04-120/2, Tinbergen Institute.
    4. Austen-Smith, David & Banks, Jeffrey S., 1996. "Information Aggregation, Rationality, and the Condorcet Jury Theorem," American Political Science Review, Cambridge University Press, vol. 90(1), pages 34-45, March.
    5. Gerling, Kerstin & Gruner, Hans Peter & Kiel, Alexandra & Schulte, Elisabeth, 2005. "Information acquisition and decision making in committees: A survey," European Journal of Political Economy, Elsevier, vol. 21(3), pages 563-597, September.
    6. Myerson, Roger B., 1998. "Extended Poisson Games and the Condorcet Jury Theorem," Games and Economic Behavior, Elsevier, vol. 25(1), pages 111-131, October.
    7. Milton Harris & Artur Raviv, 2008. "A Theory of Board Control and Size," The Review of Financial Studies, Society for Financial Studies, vol. 21(4), pages 1797-1832, July.
    8. Timothy Feddersen & Wolfgang Pesendorfer, 1997. "Voting Behavior and Information Aggregation in Elections with Private Information," Econometrica, Econometric Society, vol. 65(5), pages 1029-1058, September.
    9. Alessandro Riboni & Francisco J. Ruge-Murcia, 2008. "Preference Heterogeneity in Monetary Policy Committees," International Journal of Central Banking, International Journal of Central Banking, vol. 4(1), pages 213-233, March.
    10. Hongbin Cai, 2009. "Costly participation and heterogeneous preferences in informational committees," RAND Journal of Economics, RAND Corporation, vol. 40(1), pages 173-189, March.
    11. Duggan, John & Martinelli, Cesar, 2001. "A Bayesian Model of Voting in Juries," Games and Economic Behavior, Elsevier, vol. 37(2), pages 259-294, November.
    12. Morton, Rebecca B. & Tyran, Jean-Robert, 2011. "Let the experts decide? Asymmetric information, abstention, and coordination in standing committees," Games and Economic Behavior, Elsevier, vol. 72(2), pages 485-509, June.
    13. Jung, Alexander, 2011. "An international comparison of voting by committees," Working Paper Series 1383, European Central Bank.
    14. Jan Marc Berk & Beata K. Bierut, 2005. "On the Optimality of Decisions made by Hub-and-Spokes Monetary Policy Committees," DNB Working Papers 027, Netherlands Central Bank, Research Department.
    15. Feddersen, Timothy J & Pesendorfer, Wolfgang, 1996. "The Swing Voter's Curse," American Economic Review, American Economic Association, vol. 86(3), pages 408-424, June.
    16. Mark Harris & Paul Levine & Christopher Spencer, 2011. "A decade of dissent: explaining the dissent voting behavior of Bank of England MPC members," Public Choice, Springer, vol. 146(3), pages 413-442, March.
    17. Renée B. Adams & Daniel Ferreira, 2007. "A Theory of Friendly Boards," Journal of Finance, American Finance Association, vol. 62(1), pages 217-250, February.
    18. Alessandro Riboni & Francisco J. Ruge-Murcia, 2008. "Preference Heterogeneity in Monetary Policy Committees," International Journal of Central Banking, International Journal of Central Banking, vol. 4(1), pages 213-233, March.
    19. Blinder, Alan S., 2007. "Monetary policy by committee: Why and how?," European Journal of Political Economy, Elsevier, vol. 23(1), pages 106-123, March.
    20. McLennan, Andrew, 1998. "Consequences of the Condorcet Jury Theorem for Beneficial Information Aggregation by Rational Agents," American Political Science Review, Cambridge University Press, vol. 92(2), pages 413-418, June.
    21. Eckel, Catherine & Holt, Charles A, 1989. "Strategic Voting in Agenda-Controlled Committee Experiments," American Economic Review, American Economic Association, vol. 79(4), pages 763-773, September.
    22. Raheja, Charu G., 2005. "Determinants of Board Size and Composition: A Theory of Corporate Boards," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 40(2), pages 283-306, June.
    23. Wolinsky, Asher, 2002. "Eliciting information from multiple experts," Games and Economic Behavior, Elsevier, vol. 41(1), pages 141-160, October.
    24. Paolo Balduzzi & Clara Graziano & Annalisa Luporini, 2011. "Voting in Corporate Boards with Heterogeneous Preferences," CESifo Working Paper Series 3332, CESifo.
    25. Nicola Persico, 2004. "Committee Design with Endogenous Information," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(1), pages 165-191.
    26. Ernst Maug & Bilge Yilmaz, 2002. "Two-Class Voting: A Mechanism for Conflict Resolution," American Economic Review, American Economic Association, vol. 92(5), pages 1448-1471, December.
    27. Ernst Maug & Bilge Yilmaz, 2002. "Two-Class Voting: A Mechanism for Conflict Resolution?," Levine's Working Paper Archive 391749000000000536, David K. Levine.
    28. Ernst Maug & Bilge Yilmaz, 2002. "Two-Class Voting: A Mechanism for Conflict Resolution?," NajEcon Working Paper Reviews 391749000000000536, www.najecon.org.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Maria Flavia Ambrosanio & Paolo Balduzzi & Massimo Bordignon, 2015. "Who should review public spending?," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2015(1), pages 109-127.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jerome Mathis, 2006. "Deliberation with Partially Verifiable Information," THEMA Working Papers 2006-03, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    2. Mengel, Friederike & Rivas, Javier, 2017. "Common value elections with private information and informative priors: Theory and experiments," Games and Economic Behavior, Elsevier, vol. 104(C), pages 190-221.
    3. Bouton, Laurent & Llorente-Saguer, Aniol & Malherbe, Frédéric, 2017. "Unanimous rules in the laboratory," Games and Economic Behavior, Elsevier, vol. 102(C), pages 179-198.
    4. Bouton, Laurent & Castanheira, Micael & Llorente-Saguer, Aniol, 2016. "Divided majority and information aggregation: Theory and experiment," Journal of Public Economics, Elsevier, vol. 134(C), pages 114-128.
    5. Bar-Isaac, Heski & Shapiro, Joel, 2020. "Blockholder voting," Journal of Financial Economics, Elsevier, vol. 136(3), pages 695-717.
    6. Großer, Jens & Seebauer, Michael, 2016. "The curse of uninformed voting: An experimental study," Games and Economic Behavior, Elsevier, vol. 97(C), pages 205-226.
    7. Ruth Ben-Yashar, 2006. "Information is important to Condorcet jurors," Public Choice, Springer, vol. 127(3), pages 305-319, June.
    8. Bhattacharya, Sourav & Duffy, John & Kim, Sun-Tak, 2014. "Compulsory versus voluntary voting: An experimental study," Games and Economic Behavior, Elsevier, vol. 84(C), pages 111-131.
    9. John Duffy & Sourav Bhattacharya & Sun-Tak Kim, 2012. "Compulsory versus Voluntary Voting: An Experimental Study," Working Paper 492, Department of Economics, University of Pittsburgh, revised Aug 2013.
    10. Ruth Ben-Yashar & Igal Milchtaich, 2003. "First and Second Best Voting Rules in Committees," Working Papers 2003-08, Bar-Ilan University, Department of Economics.
    11. Maug, Ernst & Rydqvist, Kristian, 2007. "Do shareholders vote strategically? Voting behavior, proposals screening, and majority rules," Papers 07-35, Sonderforschungsbreich 504.
    12. Gerling, Kerstin & Gruner, Hans Peter & Kiel, Alexandra & Schulte, Elisabeth, 2005. "Information acquisition and decision making in committees: A survey," European Journal of Political Economy, Elsevier, vol. 21(3), pages 563-597, September.
    13. Sourav Bhattacharya, 2006. "Preference Monotonicity and Information Aggregation in Elections," Working Paper 325, Department of Economics, University of Pittsburgh, revised Dec 2008.
    14. Elisabeth Schulte, 2012. "Communication in committees: who should listen?," Public Choice, Springer, vol. 150(1), pages 97-117, January.
    15. Nikitas Konstantinidis, 2013. "Optimal committee design and political participation," Journal of Theoretical Politics, , vol. 25(4), pages 443-466, October.
    16. Iaryczower, Matias, 2007. "Strategic voting in sequential committees," Working Papers 1275, California Institute of Technology, Division of the Humanities and Social Sciences.
    17. Philip Bond & Hülya Eraslan, 2004. "Strategic Voting over Strategic Proposals, Second Version," PIER Working Paper Archive 07-014, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 02 Jan 2007.
    18. Jun Chen, 2021. "The Condorcet Jury Theorem with Information Acquisition," Games, MDPI, vol. 12(4), pages 1-33, October.
    19. Martinelli, Cesar, 2006. "Would rational voters acquire costly information?," Journal of Economic Theory, Elsevier, vol. 129(1), pages 225-251, July.
    20. Philip Bond & Hülya Eraslan, 2010. "Strategic Voting over Strategic Proposals," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 77(2), pages 459-490.

    More about this item

    Keywords

    voting; small committees; committees composition; communication in committees;
    All these keywords.

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_3732. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.