Why a Group Needs a Leader: Decision-making and Debate in Committees
AbstractI develop a model of group decision-making, in which a committee generates proposals and holds open discussions, but the ultimate decision is either taken by a leader (decision by authority) or by majority vote. Optimal communication processes are studied that combine both cheap talk statements (proposals) and costly state verification (discussions). I show that by favouring one particular agent — the leader — authoritative decision-making reduces rent-seeking discussions and often results in a higher decision-quality relative to majority decision-making. Institutions which guarantee a "right to voice" by separating the roles of decision maker and discussion leader may further improve efficiency.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6168.
Date of creation: Mar 2007
Date of revision:
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Find related papers by 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
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-03-17 (All new papers)
- NEP-CDM-2007-03-17 (Collective Decision-Making)
- NEP-POL-2007-03-17 (Positive Political Economics)
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